Leadership Traits of Ratan Tata

This report discusses the leadership traits of Ratan Tata, including his background, major achievements, and leadership theories used. It also covers his leadership style and approach, as well as lessons learned. The report is for the course Engineering Communication and Leadership (7002 ENG) at Griffith University.

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Student Number: S5129415 Student Name: Saiprasad Reddy Puli
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Student Number: S5152959 Student Name: Ravi Kumar Chintakuntla
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Engineering Communication and Leadership
7002 ENG
Assignment # 01
A report on
Leadership Traits of Ratan Tata
Team Members:
1. Harris Ahmad (Student ID: S5119424)
2. Saiprasad Reddy Puli (Student ID: S5129415)
3. Rohit Chandra Kurapati (Student ID: S5146489 )
4. Ravi Kumar Chintakuntla (Student ID: S5152959 )
Due Date:
13th September, 2018.
1

Table of Contents
Executive Summary............................................................................................................................. 2
Introduction.......................................................................................................................................... 2
Why Ratan Tata?.................................................................................................................................. 2
Background.......................................................................................................................................... 3
Earlier Development............................................................................................................................ 3
Major Achievements............................................................................................................................ 4
Leadership Qualities and Approaches.............................................................................................. 4
Five Factor Model (Big Five)............................................................................................................... 4
Behaviour Theory Used by Ratan Tata.............................................................................................. 5
Max Weber’s Leadership Model......................................................................................................... 5
Bennis and Nanus Transformational Leadership.............................................................................6
Ratan Tata as Leader and Manager.................................................................................................... 6
Lessons Learned................................................................................................................................. 7
Conclusion........................................................................................................................................... 7
References........................................................................................................................................... 8
1

Executive Summary
From the very beginning of his business career, Ratan Tata showed a dynamic personality of the
future leader who believed that if we had to be in the market, we had only two means one was working
for money and the other was working for solving the social problems of the community. Owing to this
fact, Ratan Tata chose the second mean of solving community issues. It was the leadership hallmark
of Ratan Tata by which he was able to convert the traditional culture into a new and innovative culture.
It also included the categorization of Ratan Tata on the basis of all leadership theories. It included the
background of Ratan Tata’s earlier life and how he used leadership style in his business operations.
His journey from domestic level business operation to global level business operation led TATA
Industries into a very large scale conglomerate. Ratan Tata followed a very upright spirit from the very
start of his business journey in both his personal and professional life. It indicates one of the most
important visions of his life that is to improve the living hood of his countrymen. This report includes all
the bold steps which Ratan Tata took about which many of his key executives were skeptical. Ratan
Tata formed a unique image TATA Group which was built on the platform of humanity and later
commended by the whole world. This report also includes the unique strategy of creating a working
environment which is full of trust and confidence in which Ratan Tata encouraged the decisions of his
executives along with trus and confidence, which led every member of the team sharing what they feel
about some particular decision, working for the same goal leaving their personal goal behind. It also
includes the corporate social responsibility (CSR) which is expected of every business tycoon while
running a business operation.
Introduction
Born in Surat, India in the family of Naval Tata who was adopted by Jamsetji Tata, Ratan Tata is
considered the wealthiest businessman and leading philanthropist in the country with a lot of charity
works. He has two brothers Jimmy and another step-brother Noel Tata.[1]Jamsetji Tata, founding father
of TATA Group and grandfather of Ratan Tata, took the start of his business venture from his father’s
company and later left it to purchase an oil mill later converted into a cotton mill. Jamstji Tata wanted
to start steel business which was a thriving industry at that time with the new technologies brought to
sub-continent by the British. Towards the end of nineteenth century, Jamsetji’s family was known as
one of the strongest business families of India. Later, he decided to give life to his impression of
building a large scale steel industry but was not able to put it for long journey. [2]The dream of his
grandfather was taken over by Rata Tata.
Why Ratan Tata?
Ratan Tata is one of the few global leaders that have left their mark on the horizon of global business.
He introduced the concept of strong will and humanitarian well-being together in the business world
and draw focus of business communities around the globe on the sentiment that sometimes it is better
to keep humanity above business. [3] It is the Ratan Tata who showed to the world exact meaning of
ethical leadership and why it is necessary to keep on trusting your employees. He is such a dynamic
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personality who has taught the world why we should not oppose change and what are the benefits of
introducing change in the business process. [4]
Background
Ratan Tata received his earlier education from Cathedral and John Connon School, Mumbai and
Bishop Cotton School, Shimla. Then he went to the United States of America and studied at Riverdale
Country School, later he graduated with a Bachelors of Architecture degree with a specialization in
structural engineering from Cornell University. After completing his B.S, he got attracted towards
advance management program offered Harvard University. At that time the world was going through a
transformation in the business sector. [5] Therefore, he went to Harvard Business School in 1975 to
obtain the masters in advance management program. Ratan Tata started his career journey in 1962
with Tata steel section in which he worked as stone shoveler in association with blue-collar employees
related to furnaces. It was the moral high ground Ratan Tata possessed that made him do the labour
work in a company he is going to be the owner of someday. Even though Rata Tata had done it with
lot of effort because he believes that if we want to learn something, it is always better to start with the
basics. [6] He believed that basic ethics and firm foundation give birth to a successful business.
Earlier Development
During 1970, National Radio & Electronics Company limited was going through financial crisis and its
management was proven to be a complete failure. In order to save this company from becoming
bankrupt, National Radio & Electronics Company limited appointed Ratan Tata as Director. Through
his hard work and dexterous efforts Ratan Tata finally brought NRECO from near to bankrupt to a
profitable company.[7] Seeing his achievement he was moved to Empress Mills which was going
through the same phase of financial troubles. Ratan Tata proposed a plan for this mill but his plan was
rejected by decision-making executives of that Mill which resulted in the shutdown of the mill. Then
later in 1991, Ratan Tata proved himself to be an excellent leader and manager, therefore Tata Group
appointed him as the new chairman of the group. This decision raised various objections because
many stake holders working in the group believed that Ratan Tata had not enough experience to
handle this group and some had their own motives behind opposing this decision. [8]But to their
surprise, he proved to be an effective leader and brought Tata group in such financial platform on
which nobody has ever imagined because he was never resistant to change. He actually made
everyone in shock through his capability and dynamic skills. He completely transformed the whole
management into new vision management with significantly needed changes. Prime Minister`s Council
on Trade and Industry made him head by seeing his dynamic personality. He believed that people
should not stop working; they should go one putting more efforts at every consecutive step of success
so he invested in many companies in the partnership like JP Morgan, Mitsubishi cooperation,
American International Group etc. His outstanding work and effort gave Tata Group recognition on the
global level and Tata group's financial success brought the group to get listed in New Yoke Stock
Exchange (NYSE).[9]He has invested a considerable amount of his wealth in generous trusts in India.
One of his important aims for life is to improve the living standard of his fellow countrymen. This shows
his concern towards the social issues and underprivileged situation of educated youngsters in the
3

country. He purchased the Corus when it was in financial crisis in which thousands of workers were
going to become unemployed. Feeling the situation and the future of these employees on which their
family livelihood was dependent; he purchased the company and converted it into one of the profitable
companies of India.
Major Achievements
Ratan Tata believed that nothing above the humanity in this world. His moves regarding employee
empowerment, belief and clemency towards his workers shocked business circles in India, also on the
other hand some also appreciated the steps taken by him which increased his followers not only in
India but also at the global platform.[10]Ratan Tata has been honored by many prestigious awards like
Padma Bhushan (Third Highest Civilian Award in India), Padma Vibhushan (Second Highest Civilian
Award in India), Medal of Oriental Republic of Uruguay, Fellowship of the London School of
Economics and Political Science, Award of Grand Officer, Honorary Knight Commander of the Order
of the British Empire, Oslo Business for Peace Award for his great contribution for business and social
reformation of the community.[11] He has also conferred upon honorary doctorates from Ohio State
University, Asian Institute of Technology, University of Warwick, Indian Institute of Technology Madras,
University of Cambridge, Indian Institute of Technology Bombay, Indian Institute of Technology
Kharagpur, Pepperdine University, University of New South Wales, Carnegie Mellon University,
University of Amsterdam, Singapore Management University, York University (Canada) and Clemson
University.[11, 12]
Leadership Qualities and Approaches
Tata Group changed its management culture under the leadership style of Ratan Tata as the head of
the administration, whole Tata Cluster altered; faith developed on a vast surface and melody of the
cluster. Ratan Tata brought about the whole managerial rearrangement when he overtook by winning
an extra matrix-style method forming groups.[13, 14]These alterations apparently malformed a lot in the
corporate structure, high-ranking executives were made to stand on their toes and frailties that helped
them attain important abilities. As leadership transformed from a chief expertise unit to an ample extra
dispersed form with workforces and each managers relishing better accountability and awareness
around the cluster, which in turn; drove them to work tougher in the form of a group. [15] From eccentric
leadership styles accessible like the McGregor Theory X and Y; where a theory X executive considers
workforce efforts are not innovative and evade all accountability while a theory Y executive considers
that employees get as ample pleasure from effort as they can originate with freedom, receive
accountability and are innovative; it can be understood from this, that Ratan required all his executives
to demonstrate Theory Y and he himself to be named as Theory Y executive. While being in office as
chairman of Tata Group, He fortified executives to be creative and express all their thoughts,
consulting vigorously with them providing with extra obligations and significantly securing team-efforts.
[16]
4

Five Factor Model (Big Five)
 Surgency: Ratan Tata was never married; even then he is very generic. He has fashioned a
very optimistic mark on upcoming governance of Tata group. Ratan had trait of surgency in
him due to which he always wanted to take control of difficult situation and lead Tata group
through difficult times,
 Adjustment: Ratan Tata shows actual little nervousness inside him and has countless
wisdom of safekeeping with his upcoming management. He has a stable mind and focused
forsight due to which he started many business venture which led Tata Group to becoming
one of the largest conglomerates of the country.
 Openness to Experience: Ratan Tata trusts in novelty and adaptability. He believes in
technology and has proved to the world that if we have an interest in innovation, we can make
£1200/- car (Tata Nano often termed as world’s cheapest car is made by Tata Motors).
 Agreeableness: Ratan Tata has created such a working environment, in which his team
members have placed great trust in him and express themselves friendly which means he is
sociable.
 Conscientiousness: Ratan Tata takes utmost responsibility. He has served Tata Group for
almost a decade of his life without having any self-interest. He believes in the good company
both in personal and professional life. This means that Ratan Tata’s integrity is intact.
Behaviour Theory Used by Ratan Tata
In Behaviour Theory, here are the three kinds of management styles observed in leadership.
 Autocratic
 Democratic
 Laissez-Faire
Ratan Tata is a frontrunner who involves a new democratic pattern of management method. Though at
times, he has utilized other two patterns as well. Ratan Tata is extra democratic because he constantly
inspires his management to be positive-vibe conveyors and contributors. Ratan Tata’s leadership style
depicts prospect management. Prospect management is well known about the upcoming plan and are
very well involved in choice creation procedure. Each of the long-term and short-term plans is framed
by the junior position of the leadership. [4] Employees are more likely treated as stakeholders under the
leadership of Ratan Tata. Ratan Tata has infrequently revealed particular form of an autocratic pattern
of leadership. Occasionally when wanted rapid and well-versed choices, Ratan Tata depicts a bit of
autocratic style but he is not always too forceful in his personality, speaking very rare and being novel
action man, this is marked from the method that he antagonistically thrusts for bold global transactions,
such as through the international purchase of corporate dynamos such as Corus, Jaguar and Land
Rover, and Tetley Tea.[17] Muthuraman one of his high-ranking leadership team associate refers Ratan
Tata as the chief draftsman of the Corus deal. He also said that we all were nervous about the size
and the quantity of money, but Ratan was fully confident.
5

In regular schedule and in evolving the management, Ratan Tata practices surfaces of the Laissez-
Faire pattern as the allocation of significant obligations and choice-making. From the very start of his
career as Chairman of Tata Group, he believed in not interfering in any executive's operatives, he
formed a comprehensive strategic valuation but he never hindered operational problems and
particulars, this indicates that he had comprehensive belief and confidence in his executives and
trusted in their capability, Gopalakrishnan, a managerial director of the organization, demonstrated
how abundant worth Ratan Tata spaces in his faith, this can be extremely inspiring for executives and
employees.[18]Once Ratan Tata clearly said that he will keep on trusting on his executives until they will
not break his trust. Once they have done it, he will go after them which seem to be very fair.
Max Weber’s Leadership Model
Watching at Max Weber's Transactional model and Transformational model Management, where a
front-runner is categorized in three kinds that are Bureaucratic, Charismatic and Traditional, in which
bureaucratic forerunner is that person which is continuously held by the fixed law and does not think to
cross these rules; a Traditional leader is that person that follows the whole lot from a long past and
continuously faithfully follows these customs; a Charismatic leader is that person which utilizes his
personal achievements or capabilities to motivate and is one that can be defined as fundamentally
opposite to managerial instructions and lawful principles.[19] From these prototypes, Ratan Tata comes
into the Charismatic section because he is that person who pointers by example, he came up with the
high-level innovation by introducing the world with only £1200 car the 'Nano', economical hotels or
economical consumer products, he carried far-reaching change to the whole Tata Group by
transforming it from traditional culture in to new flexible and innovative working culture.
Bennis and Nanus Transformational Leadership
As per Bennis and Nanus's Transformational Leadership model it can be said that the transformational
frontrunners develop their followers into self-determinant workforce and their key attention is to
articulate ideas and morals. Evidently so, these self-determinant leaders are aware of their destination.
[20]Their personalities comprise of reason, thoughtfulness, tenacity, authorization, and self-discipline.
They have developed the pattern which stress on transformational leadership`s four I's, which are;
 Idealized Influence (Ideal)
 Inspirational Motivation (Team creator)
 Intellectual Stimulation (futuristic)
 Individual Consideration (Act as Guider)
Ratan Tata the former head of the Tata group shows an exact transformational leadership style. It can
be said that all I's belongs to Ratan Tata. As he is the person along with countless vision hence he is
aware of the right method to prepare upcoming leadership. Through his life he has applied the team
soul in the entire cluster at each level of the company. Further he authorizes all executives and
managers and has full confidence in all, he is enormously creative and is recognized for most of the
company`s fresh products, values a great deal of significance to R&D section and safeguards the well-
being of all his workforces and executives. [21] After the terrorist attack at Taj Hotel in Mumbai on 26
October 2008, he re-stands his all employees at the period of crises. In his vision declaration he
6

expressed, "I want my group to be one of the best group in India and better from its past. Finest in the
way in which we function, finest in the products we distribute and finest in our worth arrangement and
ethics.” He clearly triggered that hundred years ago the group had started spreading its wing from
home country to develop a worldwide group, functioning in numerous countries as Indian occupational
corporation. [22]
Ratan Tata as Leader and Manager
As a chairman of an international corporate group, Ratan Tata recognized the aggressive rivalry
experienced by his corporate empire. He put all his effort to make his corporate modest at international
level. [23] Through transformational leadership process, Ratan Tata made his groups procedures and
technologies upgraded. Ratan Tata had clearly stated in his change statement that an organization
that works on the traditional process die soon as compared to the organization which welcomes
changes and see it as an opportunity to become more competitive for international business
operations. [24] It can be realized that Ratan Tata recognized the significance of evolving a good
leadership within the cluster that took Tata Group to new levels. As said by Alan Rosling (an executive
in Tata Group), "Ratan Tata is a deep thinker and extremely strategist so he can see the future clearly.
He is continuous steps forward". Ratan Tata is a personality of extreme honesty, morals and respected
principles. He cultured the similar thinking through the Tata group. As per Ratan Tata there is no other
way of doing business, just do it in an ethical way. [25] He has faith in robust value-based leadership
method in doing business. It is the true capability of Ratan Tata’s leadership that he is able to help in
transforming from a domestic business group to become a worldwide leader.
Lessons Learned
Crisis management, excellent communication, trustworthiness, vision and competence are the
foremost traits of a good leader. A good leader may have some weaknesses too, but at the expense of
extra-ordinary skills and qualities, these can be ignored. Democratic Behaviour of a leader is also
necessary for all the stakeholders to work at their fullest and breeds confidence in them. Adjustability
is also important for leaders in order to tackle problems and stubborn behaviour can lead to collapse.
Moreover, a good leader must tackle difficult situations in a democratic way and foresee a viable
solution to the problem with courage and stable emotions.
Conclusion
As the world is changing, the positions of the companies are in the dynamic mode in which they are
going up and down. Hence to handle this problem such a leader is required which can operate in all
situations by utilizing the all pattern of leadership according to his capability to keep on running on the
success track. It simply focuses that there is no particular leadership style to successfully run a
business operation. It is totally dependent on the leader which style he feels better with respect to the
situation. It also focuses that if a company has to perform better in this business market, the
employees should be given a family type of environment in which they have a unique motivation,
teamwork and are free enough to express their feeling related to any topic. It is not that only followers
7

should trust the leader, it is also the responsibility of the leader to show trust in their followers and give
them the freedom to take necessary decisions on their related position. The leader has responsibility
to keep their company at a competitive level and for this leader should not fear in taking bold steps
which will ultimately benefits the company in long run by introducing the new strategy of innovative
thinking, creativity and keep operation on the foundation of ethics because as per Ratan Tata the
simplest way of doing business is just following the ethics in business process. As ethics not only
impacts the professional life of a person but it also has a huge impact on the personal aspect of the
person. As per Ratan Tata, one of the most important things which drive our life is having a vision
because it provides us the necessary motivation which leads us towards our goal. The leader should
not fear to take decisions out of the box because if they fail at least they can guide followers through
their experience.
8

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