Ratan Naval Tata

Entrepreneurship “Mr. Ratan Tata”

RATAN NAVAL TATA

“I’m in a lonely phase of my life”

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An Assignment OnAn Assignment On

ENTREPRENEURSHIP:ENTREPRENEURSHIP:

“RATAN NAVAL TATA”“RATAN NAVAL TATA”

Submitted By:Submitted By:

SHREYAS SARVAIYASHREYAS SARVAIYA

Roll No. 41, Third Year of Bachelor of Management Studies Roll No. 41, Third Year of Bachelor of Management Studies

(VIth Semester) (VIth Semester)

Academic Year 2007 – 2008 Academic Year 2007 – 2008

Submitted To:Submitted To:

Prof. Arun Poojari

K.P.B. Hinduja College of Commerce

315, New Charni Road, Mumbai 400 004

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DeclarationDeclaration

I Master. Shreyas Shantilal Sarvaiya of K. P. B. Hinduja College of

commerce and economics of T.Y.B.M.S. Sixth semester hereby declare that, I have

completed the Assignment on “ENTREPRENURESHIP: RATAN TATA” in the

academic year 2007-2008

The further declare that the information is submitted is true and original to the

best of my knowledge.

Date: _____________ ________________________

Signature of Student

Place: _______________

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CertificateCertificate

I, hereby certify that the following student Mr. Shreyas Sarvaiya of K. P. B.

Hinduja college of commerce of T. Y. B. M. S. Sixth semester has completed the

project “ENTREPRENURESHIP: RATAN TATA” in the academic year 2007 –

2008.

The information submitted is true and original to the best of my knowledge.

___________________

Signature of Project Co-ordinator.

(Prof. Arun Poojari)

Date:

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AcknowledgementAcknowledgement

Written words have an unfortunate tendency to convert genuine gratitude into

stilled formality. However, I feel this is the best way to express my appreciation

concerned.

Working on the assignment of “ENTREPRENEURSHIP: Mr. RATAN

NAVAL TATA” has been an incredible experience for me. The success of this

project depends upon an exact blending of hard work, untiring cooperation and

guidance by my project guide Prof. Arun Poojari.

I had very nice experience working on this assignment, as I came to know a

very well known personality who is a perfect model of success and about his life and

experience. This will help me to build up my future as his life is full of experience

which one should learn.

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Index

Sr. no Particulars Pg. no

1 Profile of Ratan Naval Tata 7

2 Early years 9

3 Recognitions 10

4 Risk-taker’s dream 11

5 Ratan Tata, the soft-spoken man of steel 12

6 The man called Ratan 13

7 The Bombay House biz wiz 14

8 People’s Car 17

9 Ratan Tata’s many achievements 18

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Profile of Ratan Naval Tata

Name:

Date of Birth:

Place of Birth:

Nationality:

Ratan Naval Tata

December 28, 1937

Bombay (Mumbai), India

Indian

Age in 2007: 70 years

Education:

Occupation:

Bachelor's degree in architecture from USA’s Cornel

University Businessman

Mission/Vision: “To improve the quality of life of the communities we serve”

Company: Tata Motors Limited, Tata Group

Designation: Chairman

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Tenure in current position: 1 January 1991 to today

Tenure in company: 45 years: since 1962

Experience: Joined the Tata Group in 1962 on returning from the USA.

Initial assignment was at Tata Steel in Jamshedpur where he

spent six years on the shop floor, first in the engineering

division and finally in the projects division as technical

assistant to the Director-in-Charge. Moving on to the group's

textiles industries, he turned around Central India Textiles,

and more importantly Nelco. He was appointed Chairman of

Tata Industries in 1981, Deputy Chairman of Tata Motors in

July 1988, and assumed JRD’s position as Group Chairman

in 1991.

World class competency: Building world class companies and leaders, developing

India's first car

Awards: Ernst & Young Entrepreneur of the Year, 2003

Salary: Rs. 430,000

Google hits: 14,000

Company Performance

Revenues: Rs132.23bn

RONW: 24.19%

Net profit: Rs8103.4mn

Growth rate: 21% CAGR

Net profit margin: 3.253%

ROCE: 26.21%

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Early years

Ratan Tata, actually Ratan Naval Tata, was born on December 28, 1937, in

Mumbai. He is the present Chairman of the Tata Group, India's largest conglomerate

established by earlier generations of his family. Ratan Tata was born into the wealthy

and famous Tata family of Mumbai. He was born to Soonoo & Naval Hormusji Tata,

a Gujarati-speaking Parsi family. Ratan is the great grandson of Tata group founder

Jamsetji Tata. Ratan’s childhood was troubled, his parents separating in the mid-

1940s, when he was about seven and his younger brother Jimmy was five. Ratan

Tata’s mother moved out and both Ratan and his brother were raised by their

grandmother Lady Navajbai. He was schooled at the Campion School in Mumbai. In

1962, after graduating from Cornell University with a degree in Architecture and

Structural Engineering, Ratan joined the family business. Ratan turned down a job

offer from IBM, following the advice of J.R.D. Tata, and entered the family business.

Ratan Tata joined the Tata Group in December 1962, when he was sent to

Jamshedpur to work at Tata Steel. He worked on the floor along with other blue-collar

employees, shoveling limestone and handling the blast furnaces. In 1971, Ratan was

appointed the Director-in-Charge of The National Radio & Electronics Company

Limited (Nelco), a company that was in dire financial difficulty. Ratan Tata suggested

that the company invest in developing high-technology products, rather than in

consumer electronics. J.R.D. was reluctant due to the historical financial performance

of Nelco which had never even paid regular dividends. Further, Nelco had 2% market

share in the consumer electronics market and a loss margin of 40% of sales when

Ratan took over. Nonetheless, J. R. D. followed Ratan’s suggestions.

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Ratan Tata is regarded as the doyen of the new era of business enterprises in

the Indian mainland. The 21st century has at last, it is said, a true patron by whom the

Indians can dream of a world contest by virtue of intelligence, entrepreneurship and

perseverance. The success of Ratan through the conquest over Chorus has elevated

that urge and brought to the fore in the history of India the fervor and flavor of that

victory.

Recognitions

Group Chairman Ratan Tata was awarded the Qimpro Platinum Standard -

Business Award 2006 at a function recently. The awards are India's premier

recognition for quality in healthcare, education and business at an individual level. An

eminent panel comprising business leaders and professionals selects the winners of

the Qimpro awards after rigorous application of the most exacting standards.

Mr. Tata was honoured by the Government of India with the Padma Bhushan

on 26th January 2000, on the occasion of the 50th Republic Day of India. He serves in

senior capacities in various organizations in India and he is a member of the central

board of the Reserve Bank of India and of the Prime Minister’s Council on Trade and

Industry. His foreign affiliations include membership of the international advisory

boards of the Mitsubishi Corporation, the American International Group, JP Morgan

Chase and Booz-Allen Hamilton Inc. He is also a member of the board of trustees of

the RAND Corporation, Ford Foundation and his alma mater, Cornell University,

University of Southern California.

He also serves on the International Investment Council set up by the president

of the Republic of South Africa, the Asia-Pacific advisory committee to the board of

directors of the New York Stock Exchange, the board of governors of the East-West

Center, the advisory board of RAND’s Center for Asia Pacific Policy and the program

board of the Bill & Melinda Gates Foundation's India AIDS initiative. Mr. Tata was

conferred the title of honorary economic advisor to Hangzhou city in the Zhejiang

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province of China in February 2004. He is the chairman of the Investment

commission of India. He was also declared man of the year 2004.

Further

“The Shy Architect”: Ratan Tata has transformed India’s biggest company, and has

done it alone.

Tata Steel wins the Corus deal under Ratan Tata - FTA: Indian firm Tata Steel has

won the battle to take over Anglo-Dutch steelmaker Corus.

Ratan Tata Flew F16 at Aero India 2007 held on 7-11th Feb 2007, Yelahanka,

Bangalore.

Risk-taker’s dream

“We need to be bolder and willing to take bigger risks abroad,” Ratan Tata

had said to THE WEEK in an interview in May 2005. That was at a time when the

Tata group had taken a big leap abroad with acquisitions by Tata Motors and Tata

Steel. It had also become the third largest player in the world in the branded tea

business. Tata Motors’ acquisitions in Korea and Spain in 2005 made it the world’s

fifth largest truck maker and the third largest bus chassis maker. Tata Steel’s buy of

Singapore’s NatSteel did not add much to capacity, but made it a strong regional

player.

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Perhaps, Corus was on the Tata radar even then. Perhaps Ratan Tata had an

inkling that Tata Steel would grow from being a regional player to a global one,

practically overnight, when he said, “I am sure at some point we will go beyond the

Tetley scale.” For the Tata group, the objective of this aggressive expansion abroad is

not just acquisition for the sake of acquisition. “Going into select geographies is not

just to exploit commercial opportunities but where the group will have a development

role in that country,” Tata had said.

“We have created a very small group to look at our growth internationally,”

Tata said. An important criterion for the top team is how well the acquired company

will fit into the Tata value system. “Chemistry is an extremely important issue,” Tata

said. “We do a lot of homework to make sure the acquired company fits into our

culture and value system. If we find that a company follows practices that we are not

in agreement with, we would not go into it.”

As the group grows across geographies, it is getting noticed for its quality,

pricing and services. Emphasis rests as much on gaining mind-share for the group as

on gaining market share. “We have created a common brand and built brand

discipline,” said Tata, when asked about making brand Tata an international one.

“Now we are spending money to promote the brand in the countries we are in.... The

group now has more visibility, we are less shy of the media and we have more media

coverage.” That is certainly true of the Corus acquisition.

Ratan Tata, the soft-spoken man of steel

Ratan Tata showed in the wee hours that grace, composure and nerves of steel

can sit easy on the same personality, as he marked an audacious milestone in his

career as Tata group chairman by winning over Anglo-Dutch steel maker Corus

Group with a bid worth $12.1 billion.

In venturing into new areas, fighting corruption in his own industrial empire

and in going ahead with his car plant in West Bengal despite protests over land

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acquisition, the 70-year-old has shown he does not budge an inch once he has made

up his mind.

After he took over the mantle of Tata Sons, the group's holding company,

from legendary patriarch JRD Tata, everyone - from close lieutenants to outsiders and

experts - was sceptical of his ability to manage such a large and diversified empire

with around 85 companies in a salt-to-software range.

His grit and determination are best epitomized in what he said in an interview.

“I am unfortunately a person, who has often said: You put a gun to my head and pull

the trigger or take the gun away, I won't move my head.” That is a rare insight into a

man who protects his privacy, integrity and patriotism in equal measures.

Much before corporate governance became a buzzword in India Inc; Ratan

Tata did not hesitate to file a criminal case against one of his perceived lieutenants

and other top executives of the group for allegedly defrauding one of his companies.

Throughout his career, which began as a management trainee in Tata Steel, he

has displayed enormous courage in taking assignments that critics had written off

even before they had taken off. The Indica Car project is a case in point.

The man called Ratan

Ratan Tata’s ‘Corus Conquest’ is just the beginning of the Indian industrial

saga of ‘How the West was won’. There are instances in history which reveal that

often the time makes the man; World War II made the man Churchill, British Raj and

Indian Independence struggle made the man Gandhi. Contrary to such instances,

Ratan from the days of his youth was making the man in himself and was already

‘made’ when the time came.

Ratan’s is a story of struggle, perseverance, survival and success covering a

long period of more than four decades. When he was very young, a shattered Nelco

was thrown in his lap. From the shambles it was how it has survived as a company is

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a wonder. It was not in the best period of automobile industry that Ratan was made

vice-chairman and then chairman of Telco (now known as Tata Motors). Facing him

immediately thereafter in Telco was the worst of the industrial labour unrest led by

Rajan Nair.

The tough, cool and calculated handling of Telco by Ratan during those

turbulent times almost gave an answer to the oft-repeated question, after JRD who?

Tisco and Indian Hotels, before his becoming the Chairman, were not free from

controversies and once again it was after a stiff resistance and struggle that he

preserved and protected the shareholders’ interest in these companies.

The Tata Group, which during those days was under a serious threat of

disintegration with strong satraps like Russi Mody, Darbari Seth, Ajit Kelkar and

other contenders at play, was held together singly by Ratan under his strong and

visionary leadership. With Ratan’s taking over as the undisputed leader of the Tata

Group, he embarked upon consolidation and expansion in key strategic arrears. The

opening up of the national and global economy provided the time and opportunity for

which the man had already made himself.

Ratan's achievements in strengthening the group in critical times and

providing leadership to the Indian industry in the national and international economy

are equally praiseworthy. The license and Permit Raj which followed the Indian

independence had harshly restricted the growth of the Tata Group and therefore, in

fairness to JRD, it may be stated that his hands were tied.

But it was good fortune for the Tata Group that, when the time came, Ratan

had already made himself; and he seized the challenges and opportunities, steering the

group way ahead of others with enviable grace and dignity. Ratan will go down in the

Indian history as one of the greatest industrialists of all times. His contribution to the

Indian industry through the Tata Group is extremely valuable and everlasting. He will

be long remembered for his rare and unique adherence to noble principles, astute

business acumen, and inner steel-like strength, inherent fairness to the shareholders

and business associates and dignified demeanor all the time.

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The Bombay House biz wiz

About 15 years ago, when JRD decided to pass the baton on to the then 53-

year-old Ratan Tata, his close lieutenants had opposed the move: Ratan Tata was too

young and inexperienced, they said. The old guard at Bombay House - Russi Mody,

Darbari Seth and Ajit Kelkar, in charge of steel, chemicals and hospitality

respectively - had their own vision for the company. But the suave and soft-spoken

Ratan Tata was determined to take the group to new heights.

In one of the biggest gambles of his life, Ratan Tata put everything at stake at

Tata Motors to give the country its first indigenously manufactured ‘people's car’. At

a time when foreign carmakers were confidently raising their grip on the Indian

market, Tata went ahead with his grandiose vision and the result, the ubiquitous

Indica, is on Indian roads and in select export markets. It was, for Tata, the first

indication that he could take on foreign competitors.

Ratan Tata articulated his vision for the salt-to-software group with 86

companies in 3 phases over 15 years. In the first phase, he was primarily engaged in

cleaning the empire's Augean stables that comprised slothful chieftains who drained

resources and ran personal fiefdoms. Next, he started scouting around for

management professionals. In the second phase, Tata put together a management team

that combined Indian traits with a global vision.

“Ratan Tata has the unique ability to smell the winds of globalization much

before many of us,” says Krishna Kumar, vice-chairman, India Hotels. “The changes

that the Tata Group has undergone are entirely in sync with globalization.”

After 2000, the Tata Empire has gone on a shopping spree across the world.

The mandate was clear. Each business segment should be strong enough to survive

and thrive in the global market.

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Tata took over VSNL in 2002 with the express idea of leveraging its capacities

and increasing the scale of the company. In the last three years, VSNL has grown by

leaps and bounds by acquiring companies, starting new projects and creating

synergies with other Tata companies. By 2003 work on a 3,175km undersea cable

laying project (called Tata Indicom India Singapore System) between Chennai and

Singapore, costing $100mn had commenced.

Gopalakrishnan says, “Ratan Tata gives his team the license to be bold. But no

major decisions will happen without consultation.” Nobody, for instance, now raises

eyebrows about the feasibility of the ‘people’s car’ in the price bracket of Rs 1lakh.

Ratan Tata is a man of determination, says investment banker Uday Kotak. “Nothing

he says is casual or off-hand. When he speaks, he means business.” The Corus deal,

adds Kotak, is the biggest example of Tata's “courage and vision, which made India

proud and a force to reckon with in the global canvas”.

So, what makes Ratan Tata so confident? Industry observers say Tata not

only preaches ethics and corporate governance, but implements them in letter and

spirit. He has the ability to call a spade a spade. Much before 'corporate governance'

became a catch phrase with India Inc, Tata did not hesitate to file a criminal case

against one of his perceived close lieutenants and a top executive of the group for

allegedly defrauding one of his companies.

New frontiers have also been nurtured. F C Kohli and JRD Tata created a hen

that laid the golden eggs — Tata Consultancy Services (TCS), the country’s biggest

software company, which was listed on Indian bourses in 2004. Before it's listing, it

was a cash cow for Tata Sons. Now, Tata Sons’ holding of 80 per cent in TCS, which

has a market capitalization of Rs 1, 26,500 crore, is worth over Rs 100,000 crore. A

marginal dilution can generate enough cash for Tata Sons to gobble up many

companies through a leveraged buyout route using the acquired company's assets to

pay for the acquisition.

“Ratan Tata has great risk-taking ability. He has a strong sense of what is right

and what is wrong,” says Alan Rosling, executive director, Tata Sons. “He always

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encourages his managers to come forward and express their views rather than impose

his decision.”

India first Tata is fiercely patriotic. During 1998, he personally stepped in to

douse a nation-wide rumour that there was a shortage of salt. The rumour led to panic

buying and a price rise. Tata issued full-page advertisements stating that there was no

supply crisis and that he would personally ensure that the company met the demand.

His perseverance and determination is best epitomized in what he recently said

in an interview. “I am, unfortunately, a person who has often said that if you put a gun

to my head and pull the trigger or take the gun away, I won't move my head.” Ratan

Tata is said to protect his privacy, integrity and patriotism in equal measure. After

gobbling up Corus, he has his work cut out. As non-executive Chairman, the 70-year-

old has already handed over the day-to-day running of the empire to chosen managers,

but there is little doubt that his vision will be sought after — and provided.

People’s Car

The year also saw Ratan Tata reaffirming his next dream - a car for Rs 1 lakh.

The ideal people's car, Tata says that it will not be a stripped-down passenger car or a

glorified auto-rickshaw, but a proper car-car. He says the Rs 1-lakh car will meet all

safety and emission norms and conform to global standards. The car, he says, is still

under development and will roll out in 3 years time. Can Ratan Tata keep the Rs 1-

lakh promise? Let us what and see. All the more reason you can expect Tata to turn

his dream to reality

Given that the Tata’s now have a finger in many global pies, the big man of

Bombay House will continue to move his fingers to conduct his corporate orchestra.

Tata group chairman Ratan Tata feels that "in an ideal world, after the small

car has been launched and is successful, that would be a nice time for me to exit." For

a while now, Tata’s retirement plans and his potential successors have been intensely

speculated upon.

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Two years ago, however, Tata sought to put speculation to rest when he

extended to 75 the age until which non-executive directors could work at the group.

The decision tempered talks for a while, but started raise its head again. Tata’s most

recent comment in an interview to a UK-based newspaper is being seen as an

indicator that he still has some distance to go before opting for retirement.

Ratan Tata’s many achievements

“If you move up the corporate ladder you expect people, particularly those near the

top, to have thought through situations in terms of all implications.”

“The greater integration of the group has added an enormous strength to what we've

done because we really were a disparate group of companies.”

“You're the dog when you're doing badly. If Tata Motors is in a loss, we say, look the

market shrunk but our market share didn't shrink. But nobody listens to you.”

“When McKinsey was involved, it was very negative on steel. I've always held a view

that steel provided a return that was beyond the cost of money.”

“We're going to go after growth not just by expanding our existing products but by

creating products that will reach out to the lower end of the pyramid.”

“We are planning to grow our companies across the globe and will be looking for

both organic and inorganic growth,” says Tata.

“A company does not become global by simply participating in a certain number of

geographic markets - in that sense; it is not a sum of parts. It is its ability to become

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globally competitive, leverage global opportunities and have the required global

capabilities that makes it global. We are in the process of acquiring such a

competitive position and global coordination capabilities, both at the individual

company level, as well as at the group level,” says Tata

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Ratan Naval Tata