Tuesday 9 March 2021
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Ta-ta, Mistry!

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Economy Business Ta-ta, Mistry!

[dropcap]T[/dropcap]he news media has been agog with news of the ‘sudden’ termination of Cyrus Pallonji Mistry’s services as the chairman of the Tata group of companies, with the right wing in the country coming down like a tonne of bricks on Ratan Naval Tata on social media, led by BJP’s Rajya Sabha MP Subramanian Swamy habitually hitting him below the belt with a comment सिर्फ़ News wouldn’t reproduce. The allegation made by Mistry in his parting letter that the tycoon from the family has bent some rules for mergers, acquisitions and other deals may not be all wrong, but it misses the point of character that Tata is known for among all Indian industries and arguably those of the world. From philanthropy to activities under corporate social responsibility to impressionism, the Tatas have made a mark in society not for being money-spinners but for standing for values the group held close to its heart. To chase profits, a worker could seek out any other business house. It was Mistry’s problem that he had presumed that this tacit but well-known rule would be bent to suit the holder of 18% shares of the company that his Shapoorji Pallonji & Company held in the Tata group. In fact, prestige is so important for Ratan Tata that he is contemplating buying out all these shares even if that means a humongous financial burden of $10 billion — if only to ensure that the irksome, deposed chairman shuts up! The crux of the matter, however, is not that it is philistine to talk ill of a company after leaving it.

True, Ratan Tata is a pale shadow of the illustrious JRD (Jehangir Ratanji Dadabhoy) Tata who neither got embroiled in controversies like the Radia Tapes nor made costly decisions comparable to the acquisition of Jaguar-Land Rover; nor did JRD fail to gauge the politics of a land selected for an upcoming factory like the Nano factory Ratan chose to build in West Bengal and failed. But JRD worked in a largely socialist India where the mixed economy meant a favourable disposition of all political parties for a motley group of industrialists including the Tatas and high entry barriers for first-generation entrepreneurs. Ratan, in contrast, operated in a competitive India that had arrived on the international scene with a big bang in the 1990s. Competition can make a businessman desperate; it can also push him to wrong decisions besides surrounding him with rivals baying for his blood. Somewhere Ratan had to make a point to Bill Ford; on another occasion, he had to justify the Tatas’ concern for the have-nots. So, he bought a luxury car brand to underscore India’s arrival on the world scene, much as it threatened to spread his resources thin. And he had to build a car priced slightly above the cost of a 150 cc motorcycle, although a car being an index of upward mobility wouldn’t appeal to the poor if marketed as a vehicle of the poor. Finally, while no act of corruption can be condoned, his loose talks with corporate communicator Niira Radia did not eventually bring him large chunks of the 2G spectrum. If anything, the recording, when played, made him come across as a grandstander rather than a scheming crony. None of these activities, noticeably, made a Dhirubhai Ambani out of a Ratan Tata. Behaving like a dyed-in-the-wool Tata, he stepped aside when he was in his prime — an unforgettable act without which the world outside business circles would not have known Cyrus Mistry, no matter how rich the non-Tata businessman might have been.

In Indian business, the bottom line is family. The talk of merit is all fine, but after the flamboyant Russi Mody, here is another sharp capitalist who fell short of being a Tata, expected of anybody filling those shoes. Let Mistry revel in what he is good at somewhere else while Ratan Tata excels in being a flagbearer of the Tata ethos, which is beyond the balance sheet. Those who uphold the ideology of individual liberty and free markets must appreciate the fact that the Tatas do not run on taxpayers’ money; they are entitled to choose what gives them maximum satisfaction.

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  1. All the years we have spent learning praise of Taras from our parents.. Taras gave India steel, Airlines..how they are different from Ambanis… All in all Taras are name of Values and Ethos for Business in India

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