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Selected Case

published: 31 May 2019

  • Topic: Leadership & Organisations
  • Region: Asia

Abstract:
This case describes the Tata Group’s governance and the role it played in overseeing 150 years of growth of the Tata empire of companies. The Tata Group is one of India’s premier and oldest industrial and services conglomerates in India. The Tata Trusts (charitable foundations) own two thirds of the Group; private investors own the rest of it. The Mistry family is the largest individual private shareholder. This case describes the evolution of the group’s governance and businesses leading up to the 2012 appointment of Cyrus Mistry, the first non-family group chairman, and the transformations he attempted during his four-year reign before he was suddenly fired by the previous group chairman, Ratan Tata, who continues to be chairman of the Tata Trusts.

Pedagogical Objectives:
This case illustrates how a business is affected and shaped by its governance, whether by family owners, and family or charitable trusts. It shows how owners define and intervene forcefully in governance for better or for worse. The owners’ primary responsibility is to establish clearly articulated and understood mission, values and governance procedures. Any ambiguity in these vital issues presents a “governance risk” and potential value destruction. This case emphasizes the degree to which key family members, rather than the board, play a decisive role in governing family-run businesses.

Keywords:
Corporate Governance, Industrial Groups, Ownership, Value Creation, Governance Risk, Reputation Risk, Internationalization, M&a, Leadership


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