House of Tata, 1995: The

Next Generation

Common name vs different name

Need

Advantag
es

Issues

How

No longer a group except in culture and name

No reason to show allegiance
Need to operate in synergy; TISCO, TATA Chemicals and ACC all setting
up cement plants
Absence or presence of a personality like Mr. JRD TATA

Take advantage of opportunity and ward off threat- 1991 Indian

economy
Emphasis on companies core values and ethics
Create single strong equity to fight foreign competition
Benefit from company name

Debate in Investing public

Doubt regarding Brand subscription
Attempt to assert beyond limits of ordinary shareholders

Each subscribing company pay a contribution

TATA sons to promote a unified TATA Brand
Recognition of outstanding representation of TATA values, JRD quality
Award
Invitation to companies not using TATA name as well: Voltas, Rallies,
IHC

Commo
n Name

Greater independence to operate

Opportunity to build own brand
Independent identity, no influence of
corporate image
Work for different companies
Different guiding principles and code
of conduct as per industry
Diversified businesses, chunk of all
pies

Greater unity and cohesiveness

Reap benefit from image of parent
brand
corporate business strategy
High credibility, beneficial for start
ups
Internal rotation, retention of talent,
Attractive exit options
Common code of conduct, Common
rules
High dominance in market

Differen
t Name

Enhancing group control vs new

ventures
Enhancing Group Control

If you want to walk fast, walk

alone;
if you want to walk far, walk
together

Minority Shareholders

Spread cost of maintaining brand

Greater incentive to not damage brand
quality
Superior ability to raise capital
Attractive to foreign investors
Create value by developing promising
managers
Develop extensive internal labor market
Advantage in dealing with regulatory
bureaucracy
Lack of coordination could cause competition
Different companies can venture into
separate markets

There was no immediate benefit of

adhering to a common brand for the
companies with short term investment
goals.
Shareholders were concerned whether
the contributions they pay could justify

Sale to an outside group

Sale was a part of Restructuring plan introduced by Ratan Tata
It will not have any adverse effect on the effort to strengthen control
Loss-making Tata oil Mills company ltd. (TOMCO) was sold off to
Hindustan Unilever Ltd
Transition from a diffused group to a focused one.
Cross-Holding structure
Sold 20% Stake in TIL to HongKong based Jardine Matheson group
Capital generated was used for venture start-ups promoted through TIL
Result : Helped in bringing expertise in different business
activities such as retailing etc

Tata Administrative Services

Recruits
talent from
best
institutes

Offers
lucrative
compensatio
n: attracting
the best in
the industry

Job Rotation:
Opportunity
to work in
various
industries

Building of strong ties among different

TAS recruits:
When placed in different
companies, over the long term could
improve information flows and make it
mutually beneficial to Tata companies
Job Rotation: Working in companies in
operating in completely different sectors
but with same group values enhances those
values
Half of all TAS trainees remain with Tata-

Special
programs to
foster
leadership,
teamwork
and group
values

Lasting ties
with cohort

Thank you