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Faldu Chandni Professor Dipti Bhatt Paper of Business Ethics and Corporate Governance 13 March 2012 Ratan Tata

Relevant Values of Ratan Tata and His Role Models in Corporate Governance

Abstract In march1991, Ratan was nominated by JRD to the Tata Sons chair. Ratan found himself as the head of a conglomeration of companies.Ratan tata the son of one of JRDs cousins was an open trusting man and a shy soft spoken individual.Ratan s 1983 Tata Strategic Plan would place TIL as the groups vehicle for growth in high technology businesses in four areas(advanced electonic, biotechnology, advanced materials and alternative energy)
The 2009, annual survey by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world The survey included 600 global companies. The Tata Group has helped establish and finance numerous quality research, educational and cultural institutes in India. The group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic activities. Tata gets more than 2/3 of its revenue from outside India In June 2011, based on market value Tata Group has become India's wealthiest group with $98.7 billion.1

Harvard Case study

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Introduction
Background
New Delhi: Tata Group chairman Ratan Tata, named among the most powerful global business heads, says if he has a firm successor in place after the small car goes into production, it would be a terrific time to step away. Mr. Tata said his successor should have values and that was one of the issues that made succession so difficult. The person must maintain our values, because they are, in a manner of speaking, the DNA of the group, the crown jewel of the group. Mission: to be a competitive value provider in international business for Group companies and all our partners. Vision: Become a globally networked enterprise seizing opportunities worldwide to generate USD 25 million annual profits by 2008.

One of the most well-known and respected industrialists in India, Ratan Tata, is the Chairman of the Tata Group. Born on December 28, 1937, in Mumbai, he suffered as a child because his parents separated when he was very young. Mr. Ratan N. Tata is the

Promoter, Chairman, Chairman of Committee of Directors, Chairman of Executive Committee, Member of Remuneration Committee and Member of Nomination Committee of Tata Steel Limited. Heading the Tata Group since 1991, Ratan Tata is the Chairman of Tata Sons, holding company of the Tata Group, and major Group companies including, Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Tea, Tata Chemicals, Indian Hotels, Tata Teleservices and Tata AutoComp. He is also Chairman of two of the largest private sector promoted philanthropic trusts in India. During his tenure, the Group has further expanded its global reach, with its revenues growing over sixfold to Rs 97,000 crore ($21.9 billion). Mr Tata joined the Tata Group in December 1962. After serving in various companies, he was appointed the Director-in-Charge of The National Radio & Electronics Company Limited (Nelco) in 1971. In 1981, he was named Chairman of Tata Industries, the Group's other holding company, where he was responsible for transforming it into the Group's strategy think-tank and a promoter of new ventures in high-technology businesses. He is associated with various organisations in India and abroad in varying capacities, some of which are: Chairman, government of India's Investment Commission; Member, Prime Minister's Council on Trade and Industry; Member, National Hydrogen Energy Board; Member, National Manufacturing Competitiveness Council; Serving on the International Investment Council set up by the president of the Republic of South Africa; Serving the International Business Advisory Council of the British government to advise the chancellor of the exchequer; Member, International Advisory Council of Singapore's Economic Development Board; Member, Asia-Pacific Advisory Committee to the board of directors of the New York Stock Exchange; Member, international advisory boards of the Mitsubishi Corporation, the American International Group and JP Morgan Chase; President, court of the Indian Institute of Science, Bangalore; Chairman, council of management, Tata Institute of Fundamental Research, Mumbai; Member, board of trustees of the Rand Corporation, Cornell University and

Faldu 1 University of Southern California, and the Foundation Board of the Ohio State University; Chair, advisory board of RAND's Center for Asia Pacific Policy; and Member, Global Business Council on HIV / AIDS and the programme board of the Bill & Melinda Gates Foundation's India AIDS initiative. Mr Tata received a Bachelor of Science degree in architecture from Cornell University in 1962. He worked briefly with Jones and Emmons in Los Angeles, California, before returning to India in late 1962. He completed the Advanced Management Program at Harvard Business School in 1975. The government of India honoured Mr Tata with one of its highest civilian awards, the Padma Bhushan, on Republic Day, January 26, 2000. He has also been conferred an honorary doctorate in business administration by the Ohio State University, an honorary doctorate in technology by the Asian Institute of Technology, Bangkok, and an honorary doctorate in science by the University of Warwick.

CORE VALUES Integrity Spirit Agility Passion for excellence Unity

Awards
Padma Bhushan (2000) Padma Vibhushan (2008) KBE (2009)

Code of conduct
Foreword The values and principles which have governed the manner in which the Tata Group of companies and their employees have conducted themselves were first formally articulated as the Tata Code of Conduct in 1998.This Code was intended to serve as a guide to each employee on the values, ethics and business principles expected of him or her in personal and professional conduct. I urge each employee to read the current version of the Tata Code of Conduct and take pride in upholding the high standards of corporate and personal behaviour on which the Tata Groups reputation and respectability have been built over the past 140 years

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National interest The Tata Group is committed to benefit the economic development of the countries in which it operates. No Tata company shall undertake any project or activity to the detriment of the wider interests of the communities in which it operates. A Tata companys management practices and business conduct shall benefit the country, localities and communities in which it operates, to the extent possible and affordable, and shall be in accordance with the laws of the land.

Financial reporting and records A Tata company shall prepare and maintain its accounts fairly and accurately and in accordance with the accounting and financial reporting standards which represent the generally accepted guidelines, principles, standards, laws and regulations of the country in which the company conducts its business affairs.

Competition A Tata company shall fully support the development and operation of competitive open markets and shall promote the liberalisation of trade and investment in each country and market in which it operates. Specifically, no Tata company or employee shall engage in restrictive trade practices, abuse of market dominance or similar unfair trade activities. A Tata company or employee shall market the companys products and services on their own merits and shall not make unfair and misleading statements about competitors products and services. Any collection of competitive information shall be made only in the normal course of business and shall be obtained only through legally permitted sources and means.

Equal-Opportunities Employer A Tata company shall provide equal opportunities to all its employees and all qualified applicants for employment without regard to their race, caste, religion, colour, ancestry, marital status, gender, sexual orientation, age, nationality, ethnic origin or disability. Human resource policies shall promote diversity and equality in the workplace, as well as compliance with all local labour laws, while encouraging the adoption of international best practices.

Gifts and donations A Tata company and its employees shall neither receive nor offer or make, directly or indirectly, any illegal payments, remuneration, gifts, donations or comparable benefits that are intended, or perceived, to obtain uncompetitive favours for the conduct of its business. The company shall cooperate with governmental 6 authorities in efforts to eliminate all forms of bribery, fraud and corruption.

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However, a Tata company and its employees may, with full disclosure, accept and offer nominal gifts, provided such gifts are customarily given and / or are of a commemorative nature. Each company shall have a policy to clarify its rules and regulations on gifts and entertainment, to be used for the guidance of its employees.

Government agencies A Tata company and its employees shall not, unless mandated under applicable laws, offer or give any company funds or property as donation to any government agency or its representative, directly or through intermediaries, in order to obtain any favourable performance of official duties. A Tata company shall comply with government procurement regulations and shall be transparent in all its dealings with government agencies.

Political non-alignment A Tata company shall be committed to and support the constitution and governance systems of the country in which it operates. A Tata company shall not support any specific political party or candidate for political office. The companys 7 conduct shall preclude any activity that could be interpreted as mutual dependence / favour with any political body or person, and shall not offer or give any company funds or property as donations to any political party, candidate or campaign

Health, safety and environment

A Tata company shall strive to provide a safe, healthy, clean and ergonomic working environment for its people. It shall prevent the wasteful use of natural resources and be committed to improving the environment, particularly with regard to the emission of greenhouse gases, and shall endeavour to offset the effect of climate change in all spheres of its activities.

Quality of products and services A Tata company shall be committed to supply goods and services of world class quality standards, backed by aftersales services consistent with the requirements of its customers, while striving for their total satisfaction. The quality standards of the companys goods and services shall meet applicable national and international standards. A Tata company shall display adequate health and safety labels, caveats and other necessary information on its product packaging.s

Corporate citizenship A Tata company shall be committed to good corporate citizenship, not only in the compliance of all relevant laws and regulations but also by actively assisting in the improvement of quality of life of the people in the communities in which it operates. The company shall encourage volunteering by its employees and collaboration with community groups.

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Tata companies are also encouraged to develop systematic processes and conduct management reviews, as stated in the Tata corporate sustainability protocol, from time to time so as to set strategic direction for social development activity.

Co-operation of Tata companies A Tata company shall cooperate with other Tata companies including applicable joint ventures, by sharing knowledge and physical, human and management resources, and by making efforts to resolve disputes amicably, as long as this does not adversely affect its business interests and shareholder value. In the procurement of products and services, a Tata company shall give preference to other Tata companies, as long as they can provide these on competitive terms relative to third parties.

Public representation of the company and the Group Third party representation Ethical conduct Regulatory Compliance Concurrent employment Conflict of interest Protecting company assets Citizenship Integrity of data furnished Reporting concerns

Corporate social responsibility A Company that cares about the future Comited to corporate social responsibility Signed the United Nations Global compact Plays role in community developmen Environmentally-friendly products and technology

What is the issue or problem?

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Ratans first major challenge was to consolidate a group of individual companies which under powerful chairman or managing directors were going their own way.ratan changed the retirement age for the chairmen and managing directors to tackle this issue. His victory against Russi mody reinforced his position as the man in command of the situation and won him the respect and trust of many of the group compans stalwarts.

Problem of ratan tata

On the face of it, Brand Ratan Tata is a very difficult brand to sully. Built on the back of India's most-trusted business brand, Ratan Tata has come to represent all that is right with the world of business. The cries of 'Ratan Tata for Prime Minister' that some sections of the population lapse into every time they are upset with our system of governance might be the wishful thinking of a politically na?ve group, but the fact that a business leader is seen to be fit to handle the onerous responsibilities of leading the country is certainly a testament to the high regard in which Mr Tata is held

Which is why the events of the last few days following the publication of the Radia tapes become extremely significant for they threaten to potentially derail one of India's most iconic brands. If we think of brands as stories about products, services or people that buyers believe in, then the Tata brand has been through a series of narratives. In its early life, it offered a powerful counterpoint to the prevailing culture of traditional Indian business. It sought to show us that enlightened business was not a contradiction in terms as it successfully reconciled diverse, often conflicting, interests. The Tatas showed us how it was possible to reconcile profit with compassion, marry the needs of the business with those of its employees and directly benefit communities in which it carried out its business. The idea of business as a righteous enterprise based on a concern for goals cherished by society at large was at the heart of the Tata ethos. The Tata brand story went into less exalted territory in the 1980s where plagued by its own internal problems and left behind by a new wave of aggressive Indian entrepreneurs who worked the system to their advantage, Tata began to look like a fading aristocrat hanging on to a sense of past glory.

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Its adherence to its values began to look like an excuse for its sluggish performance and the dominance of a few satraps that showed greater interest in their own fiefdoms than in the larger brand did not help its cause. Ratan Tata's great triumph was to impart velocity to the venerable and inject ambition in the amiable. In the last decade , brand Tata has again reconciled the notions of probity and aggression, ambition and compassion, a feat which is remarkable considering the times we live in. Ratan Tata's low-key style and understated persona has added considerably to the aura that has come to surround him. The Tata brand in general and that of Ratan Tata in particular has helped the group tide over situations which would have damaged others much more significantly. The Singur issue is particularly significant because here for much of the country, the Tatas were presumptively in the right because of the reputation the group and its leader enjoyed. The importance of the Radia tapes and its messy aftermath cannot be overstated precisely because of what it might potentially damage. For any other business brand, the current controversy is challenging, but unlikely to be particularly damaging . Even in this instance, there are other business houses involved, and arguably there is greater evidence of the role they have tried to play in managing the system, but it is noteworthy that their actions have received virtually no comment. For the others, behaviour of this kind is not vastly out of line with people's expectations about them.

When he returned to India in 1962 after turning down a job with IBM on the advice of JRD, he was sent to Jamshedpur to work on the shop floor at Tata Steel with other blue-collar employees, shovelling limestone and handling the blast furnace.[3] In 1971, he was appointed the Director of National Radio and Electronics (Nelco), which was in dire straits when he came on board: with losses of 40% and barely 2% share of the consumer electronics market. However, just when he turned it around (from 2% to 25% market share), the Emergency was declared. A weak economy and labour issues compounded the problem and Nelco was quickly near collapse again. For his next assignment, in 1977 he was asked to turn around the sick Empress Mills, which he did. However, he was refused a Rs 50 lakh investment required to make the textile unit competitive. Empress Mills floundered and was finally closed in 1986. In 1981, JRD Tata stepped down as Tata Industries chairman, naming Ratan as his successor. He was heavily criticized for lacking experience in running a company of the scale of Tata Industries.[3] In 1991, he was appointed group chairman of the Tata group. As group chairman, he has been responsible for converting "the corporate commonwealth" of different Tata-affiliated companies

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into a cohesive company. He has been responsible for the acquisition of Tetley, Jaguar Land Rover and Corus, which have turned Tata from a largely India-centric company into a global business, with 65% revenues coming from abroad. He also pushed the development of Indica and the Nano. He is widely credited for the success of the Tata Group of companies, especially after the liberalization of controls after the 1990s.[1] In August 2007, Ratan Tata lead Tata Group's acquisition of British steel maker Corus. At that time, this was the largest takeover of a foreign company by an Indian company, and resulted in Tata Group becoming the fifth largest steel producer in the world. According to the BBC, however, some analysts criticized the move, saying that Tata Group had overpaid for Corus and had prioritized national pride before its shareholders.[4] Tata is set to retire in December 2012 to be succeeded by Cyrus Mistry, the 42-year-old son of Pallonji Mistry and managing director of Shapoorji Pallonji Group.[5]

2.2 Literature review: what is current thinking, findings, and approaches on the problem?

CURRENT STRATEGIES Expending globally (globalization strategy) acquiring other companies in different countries No frill strategy; a low frill strategy combine a low price and low value added, low perceived product/services benefits and a focus on a price sensitive market segment. maintain the cost of raw materials as lowest as possible and to achieve the lowest cost of final products invested a huge amount in research and development in order to achieve the highest degree of quality at the lowest price

http://investing.businessweek.com/research/stocks/people/person.asp?personId=3734075&ticker=TTM:US http://www.scribd.com/doc/19467443/TATAppt

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INNOVATION OVERVIEW A number of initiatives have been launched to spread the message of innovation and recognise innovators: Tata Group Innovation Forum (TGIF) Innovation workshops Tata Innovation Day Tata Innovation Mission Thought leadership Innovation awards Technology and research clusters Business excellence Research orientation and partnerships:

The Tata Group invests in building outstanding research facilities and forging partnerships with academic and research organisations in order to encourage creative thinking and find innovative solutions that improve our quality of life.

Trusts created by Tata Group control 65.8% of company shares,[21] so it can be said that about 66% of the profits of Tata Group go to charity.[22] The charitable trusts of Tata Group fund a variety of projects, for example the Tata Swach and the TCS project. They founded and still support such cherished institutions as the Indian Institute of Science, Tata Institute of Fundamental Research, the National Centre for the Performing Arts and the Tata Memorial

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Hospital. Each Tata Group company channels more than 4 percent of its operating income to the trusts and every generation of Tata family members has left a larger portion of its profit to them.[19] After the Mumbai attacks, Salaries of then heavily attacked Taj Hotel employees were paid despite the hotel being closed for reconstruction. About 1600 employees were provided food, water, sanitation and first aid through employee outreach centres. Ratan Tata personally visited families of all the employees that were affected. The employees relatives were flown to Mumbai from outside areas and were all accommodated for 3 weeks. Tata also covered compensation for railway employees, police staff, and pedestrians. The market vendors and shop owners were given care and assistance after the attacks. A psychiatric institution was established with the Tata Group of Social Science to counsel those who were affected from the attacks and needed help. Tata also granted the education of 46 children of the victims of the terrorist attacks

Methods

Internet Books Magazine Article 3.2 What is your impression of the utility, relevance or quality of the data you collected? The information is useful and relevant my research paper and the quality of information are good. 3.3 What special steps did you take to select or utilize the data? I have read articles of Ratan tata on internet. I have refer the company bill 2009 particularly part which is relevant to corporate governance

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Result 4.1 What is your finding? In the whole; the group is acquiring the different strategy in the different market, in the home country Tatas strategies are same as to cost leadership and differentiations. What conclusion can you draw?
The name of TATA itself says it all Trust

Acceptability Transparency Accountability

In the whole; the group is acquiring the different strategy in the different market, in the home country Tatas strategies are same as to cost leadership and differentiations.