Remembering Ratan: Here are some of the boldest business decisions taken by the legendary Tata industrialist

In a career spanning decades, Ratan Tata made some of the boldest and most transformative business decisions that redefined the way the Tata Group and Indian industry operated on a global scale. As we mourn the loss of the business titan, we celebrate the remarkable decisions that showcased not just his strategic brilliance but also his commitment to building a better world for everyone.

Acquisition of Jaguar Land Rover (JLR) in 2008

In 2008, Tata Motors, under the leadership of Ratan Tata, acquired Jaguar and Land Rover from Ford Motor Company for $2.3 billion. The acquisition was considered a high-risk move because Jaguar and Land Rover were struggling financially, and the global automotive industry was facing a downturn. Many analysts doubted the decision, questioning whether Tata Motors could turn the brands around.

However, Ratan Tata believed in the potential of these iconic British brands and focused on revitalising their product line, improving quality, and investing in new models. His strategic vision paid off as JLR's sales surged in the years that followed, making it a profitable and prestigious part of Tata Motors. By 2015, JLR's success helped Tata Motors become India's largest automobile manufacturer.

Launch of the Tata Nano

The Tata Nano, launched in 2009, was Ratan Tata's ambitious project to create the world's most affordable car, priced initially at just ₹1 lakh. The idea was to provide an affordable vehicle for Indian families who primarily used two-wheelers. Though it was hailed as a revolutionary product in terms of cost and innovation, the car faced multiple challenges, including safety concerns, branding issues, and production delays.

Despite its commercial failure, the Nano represented a bold effort to disrupt the automotive industry by focusing on cost-effective engineering, lightweight materials, and fuel efficiency. The project highlighted Ratan Tata's commitment to inclusive innovation and making mobility accessible to the masses.

Acquisition of Corus Steel in 2007

Tata Steel's acquisition of Corus Group, a British-Dutch steelmaker, for $12.1 billion was one of the largest overseas acquisitions by an Indian company. At the time, Corus was much larger than Tata Steel, which made the acquisition a transformative step for the company, catapulting it into the global league of steel producers.
The decision was not without its challenges, as Tata Steel had to deal with economic downturns and fluctuating steel prices shortly after the acquisition. However, the move gave Tata Steel access to advanced technology, a broader product range, and new markets, significantly enhancing its global competitiveness.

Emphasis on innovation and R&D

Ratan Tata's leadership was marked by a strong focus on innovation and research and development (R&D) within the Tata Group. He encouraged companies across the group to invest in new technologies and foster a culture of innovation. For instance, Tata Motors developed the Tata Indica, India's first indigenously designed passenger car, and later worked on electric vehicles and hybrid technology.

Tata Group companies also explored innovation in sectors like IT, chemicals, and steel. This emphasis on R&D positioned the Tata Group to compete effectively on a global scale, offering unique and cutting-edge products.

Globalisation of the Tata brand

Ratan Tata's vision for the Tata Group involved expanding its presence beyond India and becoming a global entity. During his tenure, Tata Group made several high-profile international acquisitions, such as Tata Tea's purchase of Tetley in 2000, Tata Motors' acquisition of Daewoo Commercial Vehicles in 2004, and Tata Chemicals' acquisition of Brunner Mond in 2006.

These acquisitions allowed the group to enter new markets, diversify its business portfolio, and reduce dependency on the Indian economy. This strategic globalisation not only increased the group's revenue but also enhanced its brand recognition worldwide.

Focus on ethical business practices and CSR

Ratan Tata is renowned for upholding high standards of ethics and corporate governance within the Tata Group. For example, he refused to engage in unethical practices during the infamous 2G spectrum scam in India, despite potential losses. His unwavering commitment to ethical principles helped build the Tata brand's reputation as one of the most trustworthy and respected in the business world, which continues to attract global partners and investors.
Ratan Tata also believed that businesses should play a significant role in social development. He institutionalised corporate social responsibility (CSR) within the Tata Group, channelling efforts towards healthcare, education, rural development, and sustainability initiatives. One notable example is the Tata Trusts, which focus on improving the quality of life in communities across India by supporting initiatives in healthcare, nutrition, water, sanitation, and education.

Formation of TCS as a major IT player

Although Tata Consultancy Services (TCS) was founded before Ratan Tata took over, he played a pivotal role in its expansion during his leadership. Under his guidance, TCS grew from a relatively small division into one of the largest IT services companies in the world, focusing on software services, IT consulting, and outsourcing.

Ratan Tata's strategy of investing in cutting-edge technology and tapping into the global demand for IT services transformed TCS into a significant revenue generator for the Tata Group, solidifying its position as a global IT leader.

Navigating the 2008 financial crisis

During the global financial crisis of 2008, the Tata Group faced multiple challenges, including liquidity crunches, declining revenues, and the need to manage its global acquisitions. Ratan Tata's astute financial management and strategic decision-making helped the group navigate this turbulent period.

He focused on reducing debt, optimising operations, and prioritising the group's long-term sustainability. His emphasis on financial discipline and maintaining investor confidence helped the Tata Group emerge stronger from the crisis while continuing its global expansion.

Decision to remove Cyrus Mistry as Chairman of Tata Sons in 2016

In October 2016, Ratan Tata made the bold and controversial decision to remove Cyrus Mistry from his position as chairman of Tata Sons, the holding company of the Tata Group. The decision was driven by concerns about Mistry's strategic direction, alleged lack of communication with the Tata Trusts, and differing views on several key issues, such as handling underperforming businesses and asset sales. Mistry's approach, which included selling non-core assets and reducing debt, was seen by some as a shift away from the group's traditionally long-term and value-driven strategy.
The move led to a legal and public battle between Mistry and Tata Sons, attracting significant media attention and debate about governance standards in Indian conglomerates. Despite the controversy, Ratan Tata's decision to remove Mistry underscored his unwavering commitment to protecting the legacy and ethos of the Tata Group.

Reducing the retirement age for top executives

One of Ratan Tata’s notable leadership decisions was to reduce the retirement age for senior executives within the Tata Group from 70 to 65. This move was intended to bring in a younger generation of leaders with fresh perspectives and innovative ideas to drive the group's growth in a rapidly changing global market.

Ratan Tata believed that younger leaders were more likely to embrace change and drive the group toward innovation, helping the Tata companies stay competitive on a global scale. This decision also paved the way for succession planning, ensuring that leadership transitions were smoother and that the next generation of executives was well-prepared to take over.

These decisions showcase Ratan Tata's visionary leadership, his ability to take calculated risks, and his commitment to values-driven growth, which have collectively shaped the Tata Group into a global powerhouse.