The group has essentially been a loose confederation of companies, but it had never faced a split in its entire existence of almost 100 years. This form of organization was deliberately created by past chairmen of the group. JRD Tata, the immediate predecessor of created by past chairman of the group. JRD. Tata, the immediate predecessor of the current chairman Ratan Tata, played the role of the promoter as well as the key investor and strategic adviser, giving wide range of powers to the heads of different group companies. But, Ratan Tata’s ideology with  respect to this organizational facet was somewhat different from his predecessor as he wanted to provide  unity and focus to this federal group so that there could be a more homogenized and highly-focused group in this highly globalized world.
Therefore, some form of reorganizing of the group was high on the agenda of Ratan Tata when he took over as the Chairman of the Tata group to provide greater focus, business rationalization and synergy in the enterprise. It was expected that that this will result in a leaner, more aggressive and more focused Tata group, which would be quick to change with time to align itself with the rapidly changing business environment.
The need of the hour for the group was twofold. First, to get out of the businesses which were no longer the core competence of the group. By 2000,after parting with many group companies, the Tata group still had a presence in as many as  25 industries, ranging from infotech to knitwear, Secondly, a need was felt tor re-establishing control over the powerful CEOs who were running different group companies as complete independent entities. A move was afoot  to replace some of them with professionals who would be willing and competent to restructure these companies in accordance with the changed business scenario because of liberalization and intensified competition.
Speed is not one of the Tata gorup’s strengths, says Raj Nair, former Managing Director, Business consulting Group in India. Indeed, the Tata group has been quick to enter newly-liberalized areas like telecom and financial services but it could not initially take a leading position in those industries as it wouldhave expected. Other companies have taken significant lead in these new economy businesses.
By playing the role of a hands-on CEO, Ratan Tata made an attempt to transform the Tata group from loose confederation into a homogenized and a more focused business entity.

Questions for Discussion and Analysis

1.How far do you agree with the restructuring of the Tata group initiated by Ratan Tata?
2.To who extent this reorganization has helped the Tata group and its leader in achieving the intended objectives?

Answer rating: 100% (QA)

1 How far do you agree with the restructuring of the Tata group initiated by Ratan Tata Answer Ratan Tata played the role of the promoter as well as t... View the full answer