How is the successor to Tata Group of companies selected | Challenges for the successor of Tata Group of Companies

August 22nd, 2010| Uncategorized.

How is the successor to Tata Group of companies  selected | Challenges for the successor of Tata Group of Companies

When 54 year old Ratan Naval Tata, a tall well built, handsome and a very shy person, took over as group chairman of TATA in 1991, nobody would have imagined that he would create a new convention to be followed and take Tata group to new heights.  The group value of Tata was 400 crore dollars then.  (Nearly Rs.12000 crores as per the then exchange rates).

In 2010 the Group value of Tata is more than 7000 crore dollars (Rs.3,22,000 crores).  This credit definitely goes to Ratan Tata.  Ratan who stirred the world with his ‘Nano’ car is ready to entrust reins to his successor in December, 2012, at the age of 75 years.  A selection committee with five experts is formed for this purpose.  There are speculations that since Ratan is a Parsi, the successor will also be from that community and of course will have ‘Tata’ at the end of his name.  Ratan Tata has denied all these speculations.  He said that Tata Group is basically an Indian Group.  Do not see it as a Parsi Group.  The successor should be an able person not necessarily a Parsi.  Whoever be the successor, he/she will have to face some challenges.

Tata Group is working with India as the base.  But 65% of the income is coming from outside.  The company has always said that the head office is in India because of some historical reasons.  But the cooperation of CEOs of other international branches is very important for the new Chairman. The main challenge before the successor would be to get cooperation from all the CEOs.

The necessity to change the features

There is less importance to International professional experts although International activities are more.  Tata Sons has no representation of international professionals at all.  Another draw back is all the members of Tata Board Group are more than 60 year old.  Young blood is necessary although the experienced persons should not be put aside.  Only one of the directors of Tata Sons  is less than 50 years old.  Same situation is there in all the other group companies.  For example, 70% of the directors are more than 60 years and only 5 of them are less those 50 years.

Show to the world

Tata group is popular all over the world. But only in fields like  Steel, cars and IT.  There is a need to advertise about the other brands also.  Many people in Britain does not know that Tata’s has Tetley.

Awareness of all the fields

96 Companies of Tata group are spread in 7 fields.  But Ratan Tata has wind up more than 16 Companies at the start of his tenure.  He initiated 32 new businesses.  Bringing changes according to the market situations is the main reason for the present standard of the company.  For example Reliance communications and Tata tele entered the market almost at the same time.  Tata Tele is now in the Top – 3 positions. So the new chairman has to take  decisions not only in international matters but also in the domestic business fields. 



Able Staff


To catch up international opportunities and continue the developments able staff is very important.  Middle level managers have a key role to play.  There is a scarcity of managers who can discuss problems in group.  Many experienced mangers are about to retire.  That vacancy is also to be filled.  For example managers in the age group of 63-65 years are going to retire soon in dozens.


In the last 19 years


From the date Ratan Tata has taken the responsibilities of Chairman, the income of the Companies has increased by 10 times, but the annual profits have increased only 4 times.  Most of the profits were distributed among the share holders.

1991 2010 Annual growth
Companies 32 29
* Income 30,920 2,93,562 28.40
* Net profit 2,627 10,867 17.10
* Market value 26,172 3,67,145 34.10
Employees 1,19,209 3,20,258 1.6
* Rs. In crores (Only registered Companies)


Tata Steel and Tata Motors are the top most companies in Tata Group.  The income of other companies keeps changing.

1991 income ( in Rs. Crores) 2010 income (in Rs. Crores)
1 Tata Motors               6,543 Tata Steels                  1,02,393
2 Tata Steels                 6,275 Tata Motors                   92,519
3 Tata Chemicals          1,464 TCS                                30,029
4 Rallies India               1,256 Tata Power                    18,713
5 Tata Power                 1,152 Tata Communictons      11,026
6 Tata Global Beverages  885 Tata Global Beverages    5,821
7 Tata SSL                        801 Voltas                              4,824
8 Andhra valley power     689 Titan industries               4,678
9 Indian Hotels                 589 Indian Hotels                  2,457
10 Titan Industries             482
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