Tata Case Essay

Words: 1211
Pages: 5

1. Which, if any, of the following initiatives undertaken by Ratan Tata do you think were good ideas?
a) Creation of a Group Brand
b) Building of equity interlocks among the Tata companies
c) Sale of a part of Tata Industries Limited to the Hong Kong-based Jardine Matheson group
d) Revitalisation of Tata Administrative Services

2. What do you think of some critics’ opinion that Ratan Tata was moving the group of companies in exactly the opposite direction from where it should be going?
The Indian economy following the 1991 crisis swiftly moved away from central planning economy towards market-based economy with the government having less intervention and control. As a result, companies were operating in what is called emerging
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1. c) Ratan had good reasons to sell a part of Tata Industries Limited to the Hong Kong-based Jardine Matheson (JM) group.
Firstly, Tata was facing finance issues to finance its new venture start-ups. Secondly, JM conglomerate was well established company that shared the same long-term values as Tata.
There were number of areas that Ratan was interest in to jointly explore, create synergies and add further value to Tata group. The way Ratan anticipated adding value is by overcoming differences in other markets through strategies that exploit economies of scope, scale and experience and group them based on similarities Ghemawat (2007). Ratan, for example, anticipated further expansion to airline industry outside of India through utilising the clout of JM.
It is important to note that while the sale to JM seems to be against Tata’s corporate strategy (capital could have been raised internally) it creates great business opportunities in the long run.

1. d) Revitalisation of Tata Administrative Services (TAS) was also a good idea.
Information in the case study highlights the fact that the prestige of recruiting and retaining top talent had waned in the recent years. Some of the benefits of revitalisation TAS unit include:
 Increasing the size of recruiting management program
 Attracting a management talent. Appendix 1