Ratan Tata Has Set a Noble Example in the Corporate World

Morarji Desai Witch Hunted JRD Tata

Morarji Desai, the then  Prime Minister of India  who was of the habit of drinking his  own  urine, dismissed J R D Tata from the post of Chairman of Indian Airlines
Morarji Desai, the then Prime Minister of India who was of the habit of drinking his own urine, dismissed J R D Tata from the post of Chairman of Indian Airlines | Source
Morarji Desai Witch Hunted JRD Tata
Morarji Desai Witch Hunted JRD Tata | Source

Air India Was the Final Loser

Business and Politics Are Different

There is a difference between business and politics. Business groups have gone bankrupt because of dishonesty. But politicians have flourished because of dishonesty. Customers do not approach the same business group or person or company if they get cheated once. But in politics, the voters vote again and again for the same politician and the political parties even after getting deceived. In business, the capital comes either with own money or through loan. In politics, the politician brings other person’s money as capital. In business, the businessman earns by working hard. In politics, the politician earns by making other people work hard for him. In politics, the politician easily pushes his son or daughter as his heir and people readily accept it at least in India. But in business, it is not very easy to do so.

People Wanted Sonia Gandhi and Rahul Gandhi

A politician need not have to bother about his voters who are basically fools. But in business, the customers and employees are not fools. Nehru brought his daughter Indira Gandhi as his heir. It was accepted by all. Indira Gandhi brought Sanjay Gandhi and Rajiv Gandhi, her two sons, into politics and as her heir in government. People happily accepted the decision. After Rajiv’s death, the people themselves wanted Sonia Gandhi and her son Rahul Gandhi to be the heir. But in business, a businessman, howsoever powerful he may be, will have to take into account the acceptability of his heir to the business partners, shareholders, customers, general public, media and others. The recent happenings in the Tata business empire illustrate this point.

Morarji Desai Witch Hunted JRD Tata

J R D Tata was harassed by Indira Gandhi and Morarji Desai to the maximum extent. Even then, JRD Tata was not moved and steadfastly carried on his business. He tolerated all the insults that were heaped on him by the political leaders. JRD Tata appointed the heads of various businesses in his empire only based on merit and management skills. JRD Tata gave these heads full freedom to develop business. JRD Tata was succeeded by Ratan Tata not because of the family relationship but because of his merit. When Ratan Tata accepted charge of the Tata Empire, reforms were being implemented in India by the P V Narasimha Rao government at the centre. Industry and business secured freedom to some extent.

Air India Was the Final Loser

But Ratan Tata had a peculiar problem not connected with politics. He found difficult to ease out the seniors appointed by his predecessor JRD Tata. Russi Mody, who was in charge of Tata Steel, refused to resign. This posed problem to Ratan Tata. Ratan Tata also introduced various internal reforms in the Tata group. He sold out unprofitable businesses and created new businesses. He introduced new technologies. If JRD Tata faced harassment and indictment from Indira Gandhi and Morarji Desai, Ratan Tata, for his share, faced similar threats from Dayanidhi Maran and Mamata Banerjee. Dayanidhi Maran openly threatened Tata using his minister post and power. Mamata Banerjee witch hunted Ratan Tata and the Tata group out of Singur. JRD Tata was dismissed as the Chairman of Indian Airlines by Morarji Desai one fine morning without giving him a chance to explain his side. The loss was not to Tata but to Indian Airlines and Air India which is languishing today. Had JRD Tata continued, Air India would have become one of the profitable public sector companies in India. Similarly Mamata Banerjee’s act was not a loss to Ratan Tata but a loss to her state West Bengal and Bengali people. What the Bengalis lost, the Gujaratis gained.

Cyrus Mistry, a Good Choice

Cyrus Mistry, a Good Choice
Cyrus Mistry, a Good Choice | Source

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Out of Cyrus Mistry and Indra Nooyi, who is more qualified to lead the Tata Group?

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Ratan Tata Has Set a Noble Example in the Corporate World

Cyrus Mistry, a Good Choice

After facing all these hurdles successfully and steering his group to an outstanding success without involvement in any scandals or controversies, Ratan Tata is retiring at the end of the year. For appointing his successor, he created a selection committee with five experts and asked them to choose a successor for the Tata group from India or abroad. The selection committee interviewed many talented people. In the end, the committee selected Cyrus Mistry for the post. Cyrus Mistry is an Indian Parsi. In fact Cyrus Mistry was present in the selection committee initially in his capacity as the Director of Tata Sons, the holding company of the Tata group. But on learning that his name was also under consideration for the post, Cyrus Mistry resigned from the committee voluntarily.

Democratic Practice

Many great names like the Pepsi-fame Indra Nooyi were considered by the selection committee. Nobody expected that Cyrus Mistry would be selected. Mistry is only 42 years old and can steer the Tata group to further successes for many years to come. Mistry is undergoing training from Ratan Tata now before he officially takes over the Tata Empire. It is noteworthy that Ratan Tata did not influence the selection committee and did not thrust his half brother Noel Tata for the post. Had Ratan Tata pointed his finger at somebody and announced him as his successor, nobody would have questioned his decision. But it was Tata’s greatness that he created rules and regulations for his successor, created an expert committee to select a suitable person for the post, accepted wholeheartedly the decision of the committee and is training Mistry for the post. Ratan Tata’s act is highly democratic and praiseworthy.

Politicians Create Mock Committees

Politicians also create committees and councils for the purpose of taking decision. But everybody knows that these committees only endorse the already taken decision of the concerned politician and simply announce it to the media. But Ratan Tata gave real freedom to the expert committee and accepted its decision without questioning. The selection process was transparent and there was no interference from anybody including Ratan Tata.

Comments 2 comments

Vaidy 4 years ago

It is not people who actually elect the politicians. Politicians are scheming. They pass rules, they form alliances and do things to defeat people's mandate. Also it is impossible for anyone to start a new political party of any clout. Using goondaism and rowdyism politicians can arm twist against anyone who will challenge the authority. But in business it is not there to that extent.

But today politics and businesses (particularly the big ones) are very closely run in the same manner. In fact big politicians are big business men. Or big corporates are run like politics.

How else can Kingfisher airlines be allowed to operate after defaulting on service tax, TDS deducted from employees but not paid to Government. It is because of the power wielded by Mallya through politics.

But there are many many businesses and quite a few can be numbered as being run on politics. But you can easily say that there are very few political parties which have power and they protect power at any cost. They operate with impunity or compunction. And all political parties and their leaders are without any exception are shameless, pricipleless and just behind power. They will do anything for the sake of power and position. NO EXCEPTIONS. That is the biggest difference.

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ramkimeena 4 years ago from India Author

Dear Vaidy,

I thank you for your valuable comments. I agree with you entirely.

Best wishes to you,

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