A company does not become global by simply participating in geographical markets
around the world. The objective of globalization is to become globally competitive, leverage
global opportunities and have the required global capabilities. It implies an organization,
which employs talented people without reference to nationality. We are in the process of
acquiring such competitive position and global capabilities.
After proposing the strategic plan in 1991, Ratan Tata observed: "I think we are in
many more businesses than we should have been in and were perhaps not concerned about
our market position in each of those businesses. I think the needs today are that we
define our businesses much more articulately and that we remain focused rather than
diffused, and that we become more aggressive than we used to be, much more market driven,
much more concerned about our customer satisfaction" (HBS Working Paper, 9-798-037).
Ratan Tata was questioned in an interviewwhat criteria he would choose in deciding what
to keep and what not to, in his groups' portfolio restructuring exercise? He replied, "one
is certainly going to be: can we be in the first three in that industry in the country?
Secondly, are we willing to continue to put money and managerial resources into that
industry to have it continue to be that way? The third is the most serious one, as to whether
that particular firm will provide us with the returns that we are expecting"
(Business World, September, 1999). Strong resentment followed with the business heads, the all
powerful satraps. As a result, marked differences began to emerge within the Tata group
with distinct centrifugal tendencies. A senior director expressed the commonly held
concern that the group was beginning to break apart.
The early 1980s saw numerous investment companies being established by
different Tata companies with the aim of carving out their own domains within the
Tatas. A number of Tata companies also began competing against one another.
Mobility across group companies declined and each company began evolving its own
culture and management cadre. Thus, the Tatas became just a social club, with the
central group having no legal, financial or moral clout. And, however much senior
directors may like to believe otherwise, several Tata executives even violated the Tata
ethos. (HBS Working Paper, 9-792-065)