Entrepreneurship “Mr.

Ratan
Tata”

RATAN NAVAL TATA

“I’m in a lonely phase of my life”

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Entrepreneurship “Mr. Ratan
Tata”

An Assignment On
ENTREPRENEURSHIP:
“RATAN NAVAL TATA”

Submitted By:
SHREYAS SARVAIYA
Roll No. 41, Third Year of Bachelor of Management Studies
(VIth Semester)
Academic Year 2007 – 2008

Submitted To:
Prof. Arun Poojari

K.P.B. Hinduja College of Commerce

315, New Charni Road, Mumbai 400 004

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Entrepreneurship “Mr. Ratan
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Declaration

I Master. Shreyas Shantilal Sarvaiya of K. P. B. Hinduja College of

commerce and economics of T.Y.B.M.S. Sixth semester hereby declare that, I have
completed the Assignment on “ENTREPRENURESHIP: RATAN TATA” in the
academic year 2007-2008

The further declare that the information is submitted is true and original to the
best of my knowledge.

Date: _____________ ________________________

Signature of Student

Place: _______________

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Entrepreneurship “Mr. Ratan
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Certificate

I, hereby certify that the following student Mr. Shreyas Sarvaiya of K. P. B.

Hinduja college of commerce of T. Y. B. M. S. Sixth semester has completed the
project “ENTREPRENURESHIP: RATAN TATA” in the academic year 2007 –
2008.

The information submitted is true and original to the best of my knowledge.

___________________
Signature of Project Co-ordinator.
(Prof. Arun Poojari)
Date:

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Entrepreneurship “Mr. Ratan
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Acknowledgement

Written words have an unfortunate tendency to convert genuine gratitude into

stilled formality. However, I feel this is the best way to express my appreciation
concerned.

Working on the assignment of “ENTREPRENEURSHIP: Mr. RATAN

NAVAL TATA” has been an incredible experience for me. The success of this
project depends upon an exact blending of hard work, untiring cooperation and
guidance by my project guide Prof. Arun Poojari.

I had very nice experience working on this assignment, as I came to know a

very well known personality who is a perfect model of success and about his life and
experience. This will help me to build up my future as his life is full of experience
which one should learn.

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Entrepreneurship “Mr. Ratan
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Index
Sr. no Particulars Pg. no
1 Profile of Ratan Naval Tata 7
2 Early years 9
3 Recognitions 10
4 Risk-taker’s dream 11
5 Ratan Tata, the soft-spoken man of steel 12
6 The man called Ratan 13
7 The Bombay House biz wiz 14
8 People’s Car 17
9 Ratan Tata’s many achievements 18

Profile of Ratan Naval Tata

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Entrepreneurship “Mr. Ratan
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Name: Ratan Naval Tata

Date of Birth: December 28, 1937
Place of Birth: Bombay (Mumbai), India
Nationality: Indian
Age in 2007: 70 years
Education: Bachelor's degree in architecture from USA’s Cornel
Occupation: University Businessman
Mission/Vision: “To improve the quality of life of the communities we serve”
Company: Tata Motors Limited, Tata Group
Designation: Chairman
Tenure in current position: 1 January 1991 to today
Tenure in company: 45 years: since 1962
Experience: Joined the Tata Group in 1962 on returning from the USA.
Initial assignment was at Tata Steel in Jamshedpur where he
spent six years on the shop floor, first in the engineering
division and finally in the projects division as technical
assistant to the Director-in-Charge. Moving on to the group's
textiles industries, he turned around Central India Textiles,
and more importantly Nelco. He was appointed Chairman of
Tata Industries in 1981, Deputy Chairman of Tata Motors in

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Entrepreneurship “Mr. Ratan
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July 1988, and assumed JRD’s position as Group Chairman
in 1991.
World class competency: Building world class companies and leaders, developing
India's first car
Awards: Ernst & Young Entrepreneur of the Year, 2003
Salary: Rs. 430,000
Google hits: 14,000

Company Performance

Revenues: Rs132.23bn
RONW: 24.19%
Net profit: Rs8103.4mn
Growth rate: 21% CAGR
Net profit margin: 3.253%
ROCE: 26.21%

Early years

Ratan Tata, actually Ratan Naval Tata, was born on December 28, 1937, in
Mumbai. He is the present Chairman of the Tata Group, India's largest conglomerate
established by earlier generations of his family. Ratan Tata was born into the wealthy
and famous Tata family of Mumbai. He was born to Soonoo & Naval Hormusji Tata,
a Gujarati-speaking Parsi family. Ratan is the great grandson of Tata group founder
Jamsetji Tata. Ratan’s childhood was troubled, his parents separating in the mid-
1940s, when he was about seven and his younger brother Jimmy was five. Ratan

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Entrepreneurship “Mr. Ratan
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Tata’s mother moved out and both Ratan and his brother were raised by their
grandmother Lady Navajbai. He was schooled at the Campion School in Mumbai. In
1962, after graduating from Cornell University with a degree in Architecture and
Structural Engineering, Ratan joined the family business. Ratan turned down a job
offer from IBM, following the advice of J.R.D. Tata, and entered the family business.

Ratan Tata joined the Tata Group in December 1962, when he was sent to
Jamshedpur to work at Tata Steel. He worked on the floor along with other blue-collar
employees, shoveling limestone and handling the blast furnaces. In 1971, Ratan was
appointed the Director-in-Charge of The National Radio & Electronics Company
Limited (Nelco), a company that was in dire financial difficulty. Ratan Tata suggested
that the company invest in developing high-technology products, rather than in
consumer electronics. J.R.D. was reluctant due to the historical financial performance
of Nelco which had never even paid regular dividends. Further, Nelco had 2% market
share in the consumer electronics market and a loss margin of 40% of sales when
Ratan took over. Nonetheless, J. R. D. followed Ratan’s suggestions.

Ratan Tata is regarded as the doyen of the new era of business enterprises in
the Indian mainland. The 21st century has at last, it is said, a true patron by whom the
Indians can dream of a world contest by virtue of intelligence, entrepreneurship and
perseverance. The success of Ratan through the conquest over Chorus has elevated
that urge and brought to the fore in the history of India the fervor and flavor of that
victory.

Recognitions

Group Chairman Ratan Tata was awarded the Qimpro Platinum Standard -
Business Award 2006 at a function recently. The awards are India's premier
recognition for quality in healthcare, education and business at an individual level. An
eminent panel comprising business leaders and professionals selects the winners of
the Qimpro awards after rigorous application of the most exacting standards.

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Entrepreneurship “Mr. Ratan
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Mr. Tata was honoured by the Government of India with the Padma Bhushan
on 26th January 2000, on the occasion of the 50th Republic Day of India. He serves in
senior capacities in various organizations in India and he is a member of the central
board of the Reserve Bank of India and of the Prime Minister’s Council on Trade and
Industry. His foreign affiliations include membership of the international advisory
boards of the Mitsubishi Corporation, the American International Group, JP Morgan
Chase and Booz-Allen Hamilton Inc. He is also a member of the board of trustees of
the RAND Corporation, Ford Foundation and his alma mater, Cornell University,
University of Southern California.

He also serves on the International Investment Council set up by the president

of the Republic of South Africa, the Asia-Pacific advisory committee to the board of
directors of the New York Stock Exchange, the board of governors of the East-West
Center, the advisory board of RAND’s Center for Asia Pacific Policy and the program
board of the Bill & Melinda Gates Foundation's India AIDS initiative. Mr. Tata was
conferred the title of honorary economic advisor to Hangzhou city in the Zhejiang
province of China in February 2004. He is the chairman of the Investment
commission of India. He was also declared man of the year 2004.

Further

“The Shy Architect”: Ratan Tata has transformed India’s biggest company, and has
done it alone.

Tata Steel wins the Corus deal under Ratan Tata - FTA: Indian firm Tata Steel has
won the battle to take over Anglo-Dutch steelmaker Corus.

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Entrepreneurship “Mr. Ratan
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Ratan Tata Flew F16 at Aero India 2007 held on 7-11th Feb 2007, Yelahanka,
Bangalore.

Risk-taker’s dream

“We need to be bolder and willing to take bigger risks abroad,” Ratan Tata
had said to THE WEEK in an interview in May 2005. That was at a time when the
Tata group had taken a big leap abroad with acquisitions by Tata Motors and Tata
Steel. It had also become the third largest player in the world in the branded tea
business. Tata Motors’ acquisitions in Korea and Spain in 2005 made it the world’s
fifth largest truck maker and the third largest bus chassis maker. Tata Steel’s buy of
Singapore’s NatSteel did not add much to capacity, but made it a strong regional
player.

Perhaps, Corus was on the Tata radar even then. Perhaps Ratan Tata had an
inkling that Tata Steel would grow from being a regional player to a global one,
practically overnight, when he said, “I am sure at some point we will go beyond the
Tetley scale.” For the Tata group, the objective of this aggressive expansion abroad is
not just acquisition for the sake of acquisition. “Going into select geographies is not
just to exploit commercial opportunities but where the group will have a development
role in that country,” Tata had said.

“We have created a very small group to look at our growth internationally,”
Tata said. An important criterion for the top team is how well the acquired company
will fit into the Tata value system. “Chemistry is an extremely important issue,” Tata
said. “We do a lot of homework to make sure the acquired company fits into our
culture and value system. If we find that a company follows practices that we are not
in agreement with, we would not go into it.”

As the group grows across geographies, it is getting noticed for its quality,
pricing and services. Emphasis rests as much on gaining mind-share for the group as
on gaining market share. “We have created a common brand and built brand
discipline,” said Tata, when asked about making brand Tata an international one.

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“Now we are spending money to promote the brand in the countries we are in.... The
group now has more visibility, we are less shy of the media and we have more media
coverage.” That is certainly true of the Corus acquisition.

Ratan Tata, the soft-spoken man of steel

Ratan Tata showed in the wee hours that grace, composure and nerves of steel
can sit easy on the same personality, as he marked an audacious milestone in his
career as Tata group chairman by winning over Anglo-Dutch steel maker Corus
Group with a bid worth $12.1 billion.

In venturing into new areas, fighting corruption in his own industrial empire
and in going ahead with his car plant in West Bengal despite protests over land
acquisition, the 70-year-old has shown he does not budge an inch once he has made
up his mind.

After he took over the mantle of Tata Sons, the group's holding company,
from legendary patriarch JRD Tata, everyone - from close lieutenants to outsiders and
experts - was sceptical of his ability to manage such a large and diversified empire
with around 85 companies in a salt-to-software range.

His grit and determination are best epitomized in what he said in an interview.
“I am unfortunately a person, who has often said: You put a gun to my head and pull
the trigger or take the gun away, I won't move my head.” That is a rare insight into a
man who protects his privacy, integrity and patriotism in equal measures.
Much before corporate governance became a buzzword in India Inc; Ratan
Tata did not hesitate to file a criminal case against one of his perceived lieutenants
and other top executives of the group for allegedly defrauding one of his companies.

Throughout his career, which began as a management trainee in Tata Steel, he

has displayed enormous courage in taking assignments that critics had written off
even before they had taken off. The Indica Car project is a case in point.

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The man called Ratan

Ratan Tata’s ‘Corus Conquest’ is just the beginning of the Indian industrial
saga of ‘How the West was won’. There are instances in history which reveal that
often the time makes the man; World War II made the man Churchill, British Raj and
Indian Independence struggle made the man Gandhi. Contrary to such instances,
Ratan from the days of his youth was making the man in himself and was already
‘made’ when the time came.

Ratan’s is a story of struggle, perseverance, survival and success covering a

long period of more than four decades. When he was very young, a shattered Nelco
was thrown in his lap. From the shambles it was how it has survived as a company is
a wonder. It was not in the best period of automobile industry that Ratan was made
vice-chairman and then chairman of Telco (now known as Tata Motors). Facing him
immediately thereafter in Telco was the worst of the industrial labour unrest led by
Rajan Nair.

The tough, cool and calculated handling of Telco by Ratan during those
turbulent times almost gave an answer to the oft-repeated question, after JRD who?
Tisco and Indian Hotels, before his becoming the Chairman, were not free from
controversies and once again it was after a stiff resistance and struggle that he
preserved and protected the shareholders’ interest in these companies.

The Tata Group, which during those days was under a serious threat of
disintegration with strong satraps like Russi Mody, Darbari Seth, Ajit Kelkar and
other contenders at play, was held together singly by Ratan under his strong and
visionary leadership. With Ratan’s taking over as the undisputed leader of the Tata
Group, he embarked upon consolidation and expansion in key strategic arrears. The
opening up of the national and global economy provided the time and opportunity for
which the man had already made himself.

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Ratan's achievements in strengthening the group in critical times and
providing leadership to the Indian industry in the national and international economy
are equally praiseworthy. The license and Permit Raj which followed the Indian
independence had harshly restricted the growth of the Tata Group and therefore, in
fairness to JRD, it may be stated that his hands were tied.

But it was good fortune for the Tata Group that, when the time came, Ratan
had already made himself; and he seized the challenges and opportunities, steering the
group way ahead of others with enviable grace and dignity. Ratan will go down in the
Indian history as one of the greatest industrialists of all times. His contribution to the
Indian industry through the Tata Group is extremely valuable and everlasting. He will
be long remembered for his rare and unique adherence to noble principles, astute
business acumen, and inner steel-like strength, inherent fairness to the shareholders
and business associates and dignified demeanor all the time.

The Bombay House biz wiz

About 15 years ago, when JRD decided to pass the baton on to the then 53-
year-old Ratan Tata, his close lieutenants had opposed the move: Ratan Tata was too
young and inexperienced, they said. The old guard at Bombay House - Russi Mody,
Darbari Seth and Ajit Kelkar, in charge of steel, chemicals and hospitality
respectively - had their own vision for the company. But the suave and soft-spoken
Ratan Tata was determined to take the group to new heights.

In one of the biggest gambles of his life, Ratan Tata put everything at stake at
Tata Motors to give the country its first indigenously manufactured ‘people's car’. At
a time when foreign carmakers were confidently raising their grip on the Indian
market, Tata went ahead with his grandiose vision and the result, the ubiquitous
Indica, is on Indian roads and in select export markets. It was, for Tata, the first
indication that he could take on foreign competitors.

Ratan Tata articulated his vision for the salt-to-software group with 86
companies in 3 phases over 15 years. In the first phase, he was primarily engaged in

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cleaning the empire's Augean stables that comprised slothful chieftains who drained
resources and ran personal fiefdoms. Next, he started scouting around for
management professionals. In the second phase, Tata put together a management team
that combined Indian traits with a global vision.

“Ratan Tata has the unique ability to smell the winds of globalization much
before many of us,” says Krishna Kumar, vice-chairman, India Hotels. “The changes
that the Tata Group has undergone are entirely in sync with globalization.”

After 2000, the Tata Empire has gone on a shopping spree across the world.
The mandate was clear. Each business segment should be strong enough to survive
and thrive in the global market.

Tata took over VSNL in 2002 with the express idea of leveraging its capacities
and increasing the scale of the company. In the last three years, VSNL has grown by
leaps and bounds by acquiring companies, starting new projects and creating
synergies with other Tata companies. By 2003 work on a 3,175km undersea cable
laying project (called Tata Indicom India Singapore System) between Chennai and
Singapore, costing $100mn had commenced.

Gopalakrishnan says, “Ratan Tata gives his team the license to be bold. But no
major decisions will happen without consultation.” Nobody, for instance, now raises
eyebrows about the feasibility of the ‘people’s car’ in the price bracket of Rs 1lakh.
Ratan Tata is a man of determination, says investment banker Uday Kotak. “Nothing
he says is casual or off-hand. When he speaks, he means business.” The Corus deal,
adds Kotak, is the biggest example of Tata's “courage and vision, which made India
proud and a force to reckon with in the global canvas”.

So, what makes Ratan Tata so confident? Industry observers say Tata not
only preaches ethics and corporate governance, but implements them in letter and
spirit. He has the ability to call a spade a spade. Much before 'corporate governance'
became a catch phrase with India Inc, Tata did not hesitate to file a criminal case

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against one of his perceived close lieutenants and a top executive of the group for
allegedly defrauding one of his companies.

New frontiers have also been nurtured. F C Kohli and JRD Tata created a hen
that laid the golden eggs — Tata Consultancy Services (TCS), the country’s biggest
software company, which was listed on Indian bourses in 2004. Before it's listing, it
was a cash cow for Tata Sons. Now, Tata Sons’ holding of 80 per cent in TCS, which
has a market capitalization of Rs 1, 26,500 crore, is worth over Rs 100,000 crore. A
marginal dilution can generate enough cash for Tata Sons to gobble up many
companies through a leveraged buyout route using the acquired company's assets to
pay for the acquisition.

“Ratan Tata has great risk-taking ability. He has a strong sense of what is right
and what is wrong,” says Alan Rosling, executive director, Tata Sons. “He always
encourages his managers to come forward and express their views rather than impose
his decision.”

India first Tata is fiercely patriotic. During 1998, he personally stepped in to

douse a nation-wide rumour that there was a shortage of salt. The rumour led to panic
buying and a price rise. Tata issued full-page advertisements stating that there was no
supply crisis and that he would personally ensure that the company met the demand.

His perseverance and determination is best epitomized in what he recently said

in an interview. “I am, unfortunately, a person who has often said that if you put a gun
to my head and pull the trigger or take the gun away, I won't move my head.” Ratan
Tata is said to protect his privacy, integrity and patriotism in equal measure. After
gobbling up Corus, he has his work cut out. As non-executive Chairman, the 70-year-
old has already handed over the day-to-day running of the empire to chosen managers,
but there is little doubt that his vision will be sought after — and provided.

People’s Car

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The year also saw Ratan Tata reaffirming his next dream - a car for Rs 1 lakh.
The ideal people's car, Tata says that it will not be a stripped-down passenger car or a
glorified auto-rickshaw, but a proper car-car. He says the Rs 1-lakh car will meet all
safety and emission norms and conform to global standards. The car, he says, is still
under development and will roll out in 3 years time. Can Ratan Tata keep the Rs 1-
lakh promise? Let us what and see. All the more reason you can expect Tata to turn
his dream to reality

Given that the Tata’s now have a finger in many global pies, the big man of
Bombay House will continue to move his fingers to conduct his corporate orchestra.

Tata group chairman Ratan Tata feels that "in an ideal world, after the small
car has been launched and is successful, that would be a nice time for me to exit." For
a while now, Tata’s retirement plans and his potential successors have been intensely
speculated upon.

Two years ago, however, Tata sought to put speculation to rest when he
extended to 75 the age until which non-executive directors could work at the group.
The decision tempered talks for a while, but started raise its head again. Tata’s most
recent comment in an interview to a UK-based newspaper is being seen as an
indicator that he still has some distance to go before opting for retirement.

Ratan Tata’s many achievements

“If you move up the corporate ladder you expect people, particularly those near the
top, to have thought through situations in terms of all implications.”

“The greater integration of the group has added an enormous strength to what we've
done because we really were a disparate group of companies.”

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Entrepreneurship “Mr. Ratan
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“You're the dog when you're doing badly. If Tata Motors is in a loss, we say, look the
market shrunk but our market share didn't shrink. But nobody listens to you.”

“When McKinsey was involved, it was very negative on steel. I've always held a view
that steel provided a return that was beyond the cost of money.”

“We're going to go after growth not just by expanding our existing products but by
creating products that will reach out to the lower end of the pyramid.”

“We are planning to grow our companies across the globe and will be looking for
both organic and inorganic growth,” says Tata.

“A company does not become global by simply participating in a certain number of

geographic markets - in that sense; it is not a sum of parts. It is its ability to become
globally competitive, leverage global opportunities and have the required global
capabilities that makes it global. We are in the process of acquiring such a
competitive position and global coordination capabilities, both at the individual
company level, as well as at the group level,” says Tata

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