The House of Tata: Governance Challenges (B)

Name: The House of Tata: Governance Challenges (B) (English version)
SKU: IMB901

Ramachandran, J; Manikandan, K S; Ramesh, Savithran

Product #:IMB901

Supplier:Indian Institute of Management Bangalore

Discipline:Strategy

Setting:Asia;India

Details:Supplemental Case (PDF) • 17 pages • 2021-11-15

Subjects:

Brand management Business law Corporate governance Emerging markets Information systems Leadership Leadership transitions Multinational corporations Shareholder relations Strategy Sales and marketing Business law and ethics Business management Economics Technology and analytics Leadership and managing people Business structures Public relations Strategy

Geography:

Asia India

Your Price:

$7.50

Purchase this material with a free Educator Account and enjoy more benefits:

Free Educator Copy
Free Teaching Notes
Build your coursepack
Discounted academic price

The two-part case "The House of Tata: Governance Challenges" is based on one of India's oldest, renowned, and most internationalized business groups. The case provides an account of the evolution of the Tata Group with an emphasis on the developments in the last 30 years (the years following economic liberalization in 1991) and the legal tussle between Tata Sons (the Group's parent company) and its minority shareholder (SP Group). The legal battle has been keenly watched for its potential ramifications on the evolution of corporate governance in India, a country marked by controlling ownership of corporations and concerns over protection of the interests of minority shareholders. The first section of Part A of the case, Tata Group: Early History, traces the early years of the Tata Group, its management philosophy, the formation of Tata Trusts, the leadership years of its long-serving legendary chairman, JRD Tata and the emergence of SP Group as a minority shareholder in Tata Sons. The second section of Part A, Ratan Tata Years, begins with the elevation of Ratan Tata as chairman of the Group in 1991 and details the Group's transformation through the institutionalization of formal systems and processes, entry into new industries, bold global acquisitions, and radical innovations such as Tata Nano. Cyrus Mistry Years captures the key strategic choices made by the Group's next chairman, Cyrus Mistry, and his Vision 2025 for the Group. The next section, The October Shock, details the abrupt removal of Cyrus Mistry as executive chairman of Tata Sons and the subsequent controversies that culminated in him being removed as a director in all the group companies. The final section of Part A, Chandrasekaran Years, provides details of the Group strategy under its current chairman, Chandrasekaran.

Learning Objectives

The first part of the case (Part A) is useful to understand the challenges of governing a business group as opposed to the challenges of governing a corporation and enables a discussion on the advantage(s), if any, of the business group as a distinct organizational arrangement. The second (B) part of the case builds on Part A and is useful to explore the fundamental debate in corporate governance on the shareholder-centered (shareholder primacy) and the firm-centered (board primacy) models of corporate governance. The case is apt for a course on Corporate Governance (to understand the differences between two fundamental models of corporate governance). This case is best used along with the companion cases - Infosys Limited: Governance Imbroglio (https://hbsp.harvard.edu/product/IMB805-PDF-ENG) and Mindtree Limited: Hostile Acquisition (https://hbsp.harvard.edu/product/IMB825-PDF-ENG). While those two cases help discuss two critical tasks of the board - monitoring and mentoring the executive leadership, this case draws attention to the fundamental responsibility of the board as an autonomous fiduciary to the corporation and is best positioned at the beginning of the course.