 "Ratan Tata")
Strategy professors in business schools have professed ill-concealed delight at the train wreck that is currently ongoing at the Tata group. The fight for control makes for a fascinating and fascinatingly diverse case study, which touches upon nearly every issue of Management 101.
Professor Ramachandran J, who teaches corporate strategy and policy at IIM-Bangalore, was one of the many quoted in an Economic Times report. “In the case under development — the ouster of Cyrus Mistry — we plan to focus on the issues related to ownership rights and managerial rights; in a listed firm, the former does not automatically afford the latter,” he told the paper.
Beyond the management speak, the case offers particularly interesting insights because this is the first time in recent memory that a group of the Tatas’s stature is in the middle of an ethical storm. The daily revelations may leave none the wiser about the reasons but there is little doubt that Ratan Tata, when he demitted office in 2012, was not ready to relinquish control of Tata Sons. Why the axe fell on Mistry so brutally is anyone’s guess.
L’Affaire Tata gives the lie to the much bandied reputation that Tatas enjoy for upholding corporate ethics. Tata companies bask in this glory, often to a distasteful degree, when they visit B-school campuses for recruitment. To the B-schooler, Tata Administrative Services holds all the cachet that the IAS held for his father’s generation. It is a mark of the deep respect for the group that even the Nira Radia scandal had failed to besmirch its cachet. The latest dispute, however, may change matters.
An unrelated but significant fallout of the latest skirmish is the renewed sense it engenders about how out of touch B-school education is. At the B-school I attended, we had an ethics workshop during the first year for which attendance was mandatory. The first session was a nice enough lecture on sustainable development, but that did not prevent students from, ironically for an ethics workshop, getting their friends to mark attendance for them.
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This was 2010, a time when high-profile corporate leaders, including Anil Ambani, were being questioned by the Central Bureau of Investigation in relation to the 2G spectrum scam. No matter. Would any of us have missed a chance to work at an ADAG firm because of this? I don’t think so. Vedanta, a global steel giant, was in the dock for bypassing the legitimate demands of tribals in the Niyamgiri hills of Odisha. I am certain it would have been given Day 1 status had it come to campus for placements.
The Tata group, to be sure, is fighting another beast. The anodyne “succession planning” fails to capture the intensity of what Dylan Thomas called the “dying of the light” in another context. Besides, even ethics go through cycles. When unleashing animal spirits became more important than sticking to the rule book after 1991’s liberalisation, Arun Shourie famously apologised to Dhirubhai Ambani for going after him during his editorship of The Indian Express.
While a new crop of business leaders, especially in the IT sphere, have come to champion corporate integrity, it cannot be denied that what we celebrate as corporate leadership can often involve shady transactions and sordid deals. We can then have young, enthusiastic students attend innumerable sessions on ethics and sustainable development, but these measures will have little relevance so long we live in a world where corporate competition and greed often cross the boundaries of ethical behaviour, something that is couched as the “demand of growth”.
Meanwhile, the workshop went as planned. While most sessions focused on what seemed at the time carefully curated idealism, one session discussed the Satyam scam of 2009, whose memory was still fresh. The speaker, a professor of finance, was scathing in his criticism of Ramalinga Raju, but even to those who were generous towards the workshop, it was clear that the case spoke more to personal venality than corporate wickedness. If anything, Raju’s downfall indicated that he had not been sly like some of our other principals, who get away with far greater crimes because they know how to put their passports to use.
There was general disinterest in the workshop because students could not fathom the value our professors promised the workshop brought to our education. Most of my batch mates ended up working for companies that had skeletons, revealed or otherwise, in their closets. Perhaps the truth is that we live in an imperfect world, when even the House of Tatas finds it has little place for textbook ethics.
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