Wednesday, November 9, 2016

Tata Sons Governance - Chairman Mistry' Ugly Ousting- Why?

         Fanfare Entry And Ugly Ouster Of Commander-in-Chief of Tata Sons                       

               Tata  Sons is symbol of glorifed Indian Private organisation with a 148 years history. Last year, its tunover was in excess of  $100 billion. It has operations in more than 100 countries. It provides job to more than half million. Tata Sons has 66% shares of different tata truts. Cyrus' father Pallonji Mistry has a shares of 18.5 % in it. Rest 15.5 % shares is of different companies.
Cyrus P Mistry took charge of TATA group on December 28, 2012. There are huge excitements and speculations inside and outside the organization. Profit maximization is the motto of a business organization. But it is not applicable to TATA. This makes it different and international brand? A perusal of Tata’s statement endorsed this difference.  
Jamsetji N. Tata (Founder, Tata Group, 1868) said “In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence.”  J. R. D. Tata stated “The Tata philosophy of management has always been and is today more than ever, that corporate enterprises must be managed not merely in the interests of their owners, but equally in those of their employees, of the customers of their products, of the local community and finally of the country as a whole.” 
 In 2005, Ratan Tata, dreamed One hundred years from now, I expect the Tatas to be much bigger than it is now. More importantly, I hope the Group comes to be regarded as being the best in India — best in the manner in which we operate, best in the products we deliver and best in our value systems and ethics. Having said that, I hope that a hundred years from now we will spread our wings far beyond India…” 
Now, search is on Why is Cyrus ousted? There are many speculations and stories around in different media. Then search committee was so impressed with the ideas of Cyrus that they offered the job. During the deliberations to the committee, he had detailed what the structure of the group should look like; he had proposed many new propositions with innovative touch.
Impressed search committee offered Cyrus job of Chairman. But, once he was in the chair, it was a different story. Not only did he not follow through, he went in the other direction. So, First main reason of his ugly ouster is " He failed on Walk to his own Talk- which he put before search committee."
The Second main reason is, he failed to learn governance of Tata. Though Tata is a private commercial identity, but its moto is a mix one- not sole profit making. It carries its social values, culture and ethic all along even at the cost of loss in its 148 years history. Here, Tata Sons is different than other big Indian commercial organisations. And these characters are in the administrative blood and body of TATA and its Brand.                     
 Governance of Tata sons is a judicious mix of both Public and Private styles. Tata is brand because of some of its characteristics and style of public governance in spite of being a purely commercial organisation in look.  No money making at the cost of its values, culture and ethic erosion what is its brand.
 This well cherished governance character of Tata can't be changed over a short period which Cyrus Tried and failed- hence, he is  no more on chair. He ran the administration solely on commercial lines of profit making and ignoring brand characteristics of Tata Sons- Values, Ethic, Culture. As a result, he could not kept and carried all along in his so called team. Finally he left alone and thrown out. 
Governance is a big issue before both public and private managers and actors. Public governance issue has been always in light. Public do not repeat our public repereseatatives if they failed in their promised governance. For the first time, a private sector followed same footsteps by throughing its chairman Cyrus Mistry by a majority decision of the board of Tata Sons. 

Heera Lal ( Views are persoanal based on different sources)