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Tata Group invested approximately $18 billion in 37 cross-border acquisitions by 2008. It acquired an average one company per year from the mid 1990s to 2003 in its globalisation efforts taken under the leadership of Ratan Tata as the group's chairman. Sunil Mithas, professor at Robert H Smith School of Business at the University of Maryland, in his book "Making the Elephant Dance" documented this journey of transformation, which took the group to a $103-billion global powerhouse in 2014 from a $5.8-billion worth firm in 1992.
In an interview with Abhineet Kumar he talked about the successes and setbacks that the group had on its journey and what is in his book for others to learn. Edited excerpts:
Tata Group’s success story is today heavily dependent on TCS. How healthy and sustainable is this?
It is not just one company TCS, in fact JLR is doing quite well. But it is true that you have one company that is doing so much better in comparison to others. But if you look at Tata Steel’s India operations they are also doing well. Then one can say what is in the benefits of globalisation. There are setbacks such as Corus. But there is also JLR which is making handsome profit. So, on the whole it’s net off.
In that context other companies such as GE and Siemens also have so many uncertainties. It is not the case that they have uniform excellence everywhere. There is a lot of heterogeneity within the business units that goes on all the time. In IBM also some business are doing well, but some are not doing so, which is why they are losing money.
Tata Group’s globalisation efforts have also brought many setbacks along with some successes. How do you reflect on that?
Managers can take managerial action and then the nature intervenes or government intervenes. Nobody can predict the perfect timing for such actions. And that is what happened in some of the cases. It was hard for Tata Steel to predict 2008 financial crisis, when it happened it hit the steel sector. So there were good intentions for the globalisation yet these setbacks such as Corus happened.
The counter is what would have happened if you had not done that. Because of this Tata Business Excellence Model, you at least have a methodology to cope with that. All of us are suffering because of the lower steel prices in the Europe, so what is it that we have to do. May be we have to close some plants, methodology still works and that is how they are trying to turn around the situation.
Do you see the conglomerate going in the right direction to overcome its setbacks?
These things are hard to follow, but my belief is that as long as you are following structured and rigorous processes and managers are doing thing that they honestly believe in, you are in right direction. They have only that much control and after that it is for the markets, how the markets react we do not know. But at least they are taking the right actions and that is the only thing under their control.
What is your book all about and what can other companies learn from it?
It is a story of Tata Group’s persistence in its journey of business excellence. The book provides a road-map for corporate transformation and renewal using the levers of business excellence, innovation and globalisation by documenting the Tata group’s transformational journey from a $5.8 billion Indian firm in 1992 to a $103 billion global powerhouse in 2014.
What does it take to transform a large and complex organisation? The book provides a formula using Tata Business Excellence Model (TBEM), a framework used by the Tata group to help companies achieve global competitiveness and excellence in their business performance. The methodology of TBEM is modeled on the US-based quality initiative, the Malcolm Baldrige National Quality Award.
