Ratan Tata strongly believed that to achieve growth at the Tata Group, it was necessary to create technologically superior and exciting products. According to him, the Tata Group would have to distinguish itself from other companies through innovation and low costs.

Ratan Tata focused on organic as well as inorganic growth strategies to grow the Tata Group. Some of the group’s businesses grew organically. For instance, TCS grew through investments in Greenfield projects. The software company grew by upgrading its technological capabilities, skill sets, and its infrastructure, and in the process, developed several new innovative software products. In 1981, in a bid to improve its R&D skills, TCS founded the Tata Research, Design and Development Center (TRDDC). The center played a key role in developing world class products. ...

Human Resource and Organization Behavior Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

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CYRUS MISTRY STEPS IN

In 2010, the board of Tata Sons constituted a panel to find a successor to Ratan Tata. Mistry was also part of this panel. As part of the panel, Mistry suggested ways in which the group could be transformed and how the debt burden could be reduced. His suggestions impressed the panel and in a surprising move, it concluded that Mistry would take over as Chairman of Tata Sons. Mistry by virtue of his age came in with a lot of promise, especially of continuity, when he became chairman of Tata Sons at the age of 44 in 2012...

THE TATA–MISTRY WAR BEGINS...

To some extent, Mistry’s move of closing down underperforming companies helped the group increase its market capitalization by 56 percent from US$ 67.5 billion in December 2012 to US$ 125 billion in 2016. However, his way of handling business did not go down well with Ratan Tata and the board at Tata Sons. ..

THE ALLEGATIONS AGAINST MISTRY

Since there were speculations in several quarters over Mistry’s sudden removal, Tata Sons said in a letter to the media that Mistry’s performance was the main reason he had been fired and held him responsible for rising expenses and impairment provisions...

MISTRY’S RESPONSE

After his ouster in October 2016, Mistry said in an email to the board of Tata Sons and trustees of Tata Trusts, “I cannot believe that I was removed on grounds of non-performance. I am not sure if the individual board members and trustees truly appreciated the extent of the problems I had inherited.” He added, “Prior to my appointment, I was assured that I would be given a free hand. The previous Chairman (Ratan Tata) was to step back and be available for guidance and advice as and when needed.” But after his appointment, Mistry stated that the board had modified the Articles of Association, changing the rules of engagement between the board of Tata Sons, the Tata Trust, the operating companies, and the Chairman.. ..

LOOKING AHEAD

Some industry observers felt that the board at Tata Sons should have planned a graceful exit for Mistry since he was deeply entrenched in the Tata Sons board since he had been working with the Tata Group even before becoming the chairman of Tata Sons. Before planning his sudden exit, the board should have taken into account Mistry’s standing in the corporate world, his family firm’s 18.4 percent stake in Tata Sons, and his age which would have brought in longevity and continuity to the post of chairman of Tata Sons. According to former member ....

EXHIBITS

Exhibit I:Timeline of Tata Group
Exhibit II: Tata Group’s International Acquisitions