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Ratan Tata, The Legacy Of India's First Global Business Titan

The patriarch of the Tata family dynasty retires Friday, his 75th birthday, after helping India reimagine its role in the world of business.

Ratan Tata, CEO of Tata Sons
Ratan Tata, CEO of Tata Sons
Patrick de Jacquelot

MUMBAI - On Friday, coinciding with his 75th birthday, Ratan Tata, the CEO of Tata Sons, the holding company of the Tata group, will officially retire. Although India will bid farewell to its most famous businessman, Tata has become much more than a national celebrity.

One can draw a long list of superlatives to make him stand out from his competitors: His firm is the oldest (founded in 1868), the biggest (with activities ranging from computing to hotels, automobile manufacturing to the retail industry), the most international, and also the one that has the best reputation regarding integrity and its overall contribution to Indian society. Ratan Tata has embodied all this since he rose to lead the empire in 1991.

The figure of this tall single man has become utterly familiar for every Indian. Still active although he is now in his seventies, his elegance is nonetheless of a discreet kind, to match his shy personality. This descendent of a 150-year-old industrial dinasty should not be mistaken for one of these new billionaires, the nouveaux riches who show off their staggering mansions, their yachts and their bad taste. Within the firm, people are happy that Tata does not appear in the rankings of India's biggest fortunes, as the family only owns a small part of the capital of the empire named after it.

The tributes about to flow as Ratan steps down from the head of the conglomerate are because his achievements reach so wide, and so deep. First: He has managed to build a real industrial group. When Tata was appointed head of the conglomerate, its organization was quite loose. Back then, Tata Sons owned only a small part of the firm's companies, whose bosses thought they were not accountable.

More cohesion than 20 years ago

His first task was to reinforce the holding in the firm's subsidiaries, impose more discipline and shape group culture: Even though the group's very diverse activities remained autonomous, new mechanisms were set up to favor the flow of people and ideas, organize money transfers and promote a comprehensive brand.

And so the Tata group has far more cohesion today than it did 20 years ago. Some observers claim that Tata was extremely lucky: "The group had a small computing subsidiary called TCS," recalls an Indian corporate insider. "When the revolution in subcontracted computing began, TCS became a leader in this sector and the most valuable company in the group. Ratan had little to do with it. But the huge dividends paid by TCS allowed him to strenghten his influence in the other subsidiaries." That said, most great leaders must rely on a certain amount of luck.

Ratan Tata's second main achievement was to give the group an international dimension. Known here as the symbol of the Indian industry, Tata makes 60% of its sales abroad, and the now outgoing chief was the force behind the major international acquisitions. The purchase of tea company Tetley has made Tata the leader in this sector, for instance. The two most remarkable operations led by Tata were the acquisitions of steel company Corus for $13 billion in 2007 and Jaguar Land Rover bought a year later for $2.3 billion. These acquisitions of storied British firms have brought Tata international fame.

The financial community criticized Ratan Tata for buying high, right before the international financial crisis broke out. The spectacular recovery of Jaguar Land Rover, which became the first contributor to Tata Motors', allowed Ratan, who loves car, to silence some of his detractors. The general worsening of the steel industry, on the other hand, has thus far prevented the group from straigthening out Corus and Tata Steel. Other acquisitions proved less fruitful. The acquisition of 10% of the luxury hotel brand Orient-Express in 2007 for example.

These operations have changed the culture of the group. From a strictly Indian giant, Tata has become a global conglomerate with a presence in more than 80 countries, and some 450,000 employees. It is perhaps the most significant example of a real global brand from the developing South, with more than 100 operational units and total revenue of $100 billion in 2011-2012. Its 31 companies quoted on the stock exchange have a comprenhensive capitalisation of 67 billion euros.

Charity business

Ratan Tata's third achievement is the fact that he reinforced the image and the culture of the group. Coming from a Parsi family of Zoroastrianism faith, the Tata family has always put forward ethics and community service. With real results: Throughout the 20th century, the group's ownership has slowly ceded its holdings to charity trusts, which now own two-thirds of the group. Most of the group's profits are used to fund social and cultural actions carried out by these trusts, rather than to the family which only owns less than 3% of the group.

Meanwhile, the Tatas have always expressed their absolute opposition to corruption, which has given them a reputation as "clean" that contrasts with many other Indian companies. Ratan Tata has made himself the herald of these principles. Obviously, as an analyst notes, "there is a public relations aspect to it: Tata sells buses to city councils and trucks to the army, it is impossible to believe that he never gives bribes to anyone. But it is undeniable that he really prefers to do things cleanly."

If everyone praises the success of Ratan Tapa, some criticize him for some strategic mistakes, including the Nano, "the world's cheapest car." Although it is often seen as a technical achievement, Ratan Tata's beloved auto "baby" fails to sell. Specialists claim that setting it up as a low-cost car puts off Indian customers – who are often looking for prestige. It is a big marketing mistake, quite surprising for a group with deep roots in local reality.

Following Tata's footsteps

Replacing the towering Ratan Tata will be a tough challenge for his successor Cyrus Mistry. Chosen in November 2011, Mistry has one weakness and two strengths. His main weakness: to be the first head of the group who is not called Tata. Cyrus is not a member of the family, although indirect links exist: His sister married a Tata, Ratan's step-brother. Two assets make up for this uncertainty: Cyrus Mistry comes from the small Bombay Parsi community, just like the Tata family, and is therefore better suited to understand the very specific culture of the group.

Then, there is also the crucial fact that Mistry's family owns 18% of Tata Sons, thanks to an operation made 80 years ago. It is a much bigger stake than what the Tata family owns today. Cyrus Mistry will therefore benefit from a better legitimacy in regards to the capital. Mistry, 44, has a lot to prove. Although he proved to be a a good manager of the family group Shpoorji Pallinji, in the construction and real estate industries, he will now operate on a much larger scale.

The business community holds its verdict yet for a good reason: They don't know him very well. "Cyrus Mistry? I have never met him," says the boss of an Indian economic daily. "I don't know him," says a banker from Bombay who is also a member of the Parsi community.

The fact that the transition was extremely well prepared will help Cyrus Mistry, explains Aman Agarwal, a professor at the Indian Institute of Finance. "He still lacks maturity, but he has time, since this group's companies are managed by professionals. And he has no urgent problem to tackle, no hostile takeover or the need to re-orientate the group."

But the professor underlines the fact that the presence of the Mistry family in Tata Sons might paradoxically lead to some conflict. He will have to make sure it does not seem as if he is "favoring one campany from the group over another, depending on personal interests," like giving more capital to subsidiaries where Tata Sons has larger shares for instance.

For most observers, in any case, the new boss will be able to push the group on the international sphere even more. Ratan Tata, who will play the role of a sage, has already publicly suggested that the group keeps investing abroad. No longer in developed countries such as the United Kingdom but in emerging markets like Africa and South Asia. For Tata, globalization has just begun.

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The Colonial Spirit And "Soft Racism" Of White Savior Syndrome

Tracing back to Christian colonialism, which was supposed to somehow "civilize" and save the souls of native people, White Savior Syndrome lives on in modern times: from Mother Teresa to Princess Diana and the current First Lady of Colombia, Verónica Alcocer.

photo of a child patient holding hand of an adult

Good intentions are part of the formula

Ton Koene / Vwpics/ZUMA
Sher Herrera


CARTAGENA — The White Savior Syndrome is a social practice that exploits or economically, politically, symbolically takes advantage of individuals or communities they've racialized, perceiving them as in need of being saved and thus forever indebted and grateful to the white savior.

Although this racist phenomenon has gained more visibility and sparked public debate with the rise of social media, it is actually as old as European colonization itself. It's important to remember that one of Europe's main justifications for subjugating, pillaging and enslaving African and American territories was to bring "civilization and save their souls" through "missions."

Even today, many white supremacists hold onto these ideas. In other words, they believe that we still owe them something.

This white savior phenomenon is a legacy of Christian colonialism, and among its notable figures, we can highlight Saint Peter Claver, known as "the slave of the slaves," Bartolomé de Las Casas, Mother Teresa of Calcutta, Princess Diana herself, and even the First Lady of Colombia, Verónica Alcocer.

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