Ethical Leadership: Ratan Tata and India’s Tata GroupLeonardo da SilvaLincoln Memorial UniversityEthical Leadership: Ratan Tata and India’s Tata GroupQues±on 1“The World Bank es±mates that over $1 trillion are paid in bribes annually (5% of the global GDP).” (Barcellona, C., 2015) It should not be, but in nowadays world, corrup±on is just a normal part of business. I personally believe that there is no way to do business nowadays without corrup±ng yourself. The business world has been already too compe±±ve and many are the reasons for that. Thus, being a completely non-corrupt company is just impossible to survive in the business world. Despite these shocking Fgures exposing the malign nature of corrup±on, there are situa±ons in which pe²y bribes are necessary to “grease the wheel of commerce”. Small bribes can ensure ac±on and s±mulate business rather than hampering it. This is re³ected in certain pieces of legisla±on, such as the U.S. ´oreign Corrupt Prac±ces Act which allows “grease payments”. Theseare oµen paid to foreign o¶cials to speed up processes like paperwork and customs. As such, it is important to dis±nguish between white mail bribes (having the intent to in³uence a decision and involving illegal ac±on) and lubrica±on bribes (accelera±ng or easing rou±ne legal transac±ons). Since this second type of bribe does not alter the nature of a deal, it is
For the fiscal year ended 2010-2011, India's largest multinational conglomerate, the Tata Group, reported that its international operations constituted 58 percent of the group's revenues with US$ 48.3 billion.1 Analysts opined that while exports from India were the key to the growth of Tata Group's international business, the Tata Group companies' investments in assets overseas through greenfield projects, joint ventures, and acquisitions had also contributed to the group's growth. Of these, inorganic growth was a crucial component of Tata enterprises, according to analysts. Founded in 1868 by Jamsetji Tata, the Tata Group had pioneered several industries in India: power, steel, airlines, and hospitality.
For the FY ended 2011, the group operated in seven broad sectors ranging from automobiles, steel, energy, hotels, chemicals, and consumer goods to communication systems with Tata Steel, Tata Motors, Tata Consultancy Services, and Tata Power accounting for nearly 50 percent of the group's revenue.2
In its initial years, the group's growth was largely organic due to the industrial development in India which was not conducive to alliances being formed with international companies. The Tata Group grew majorly through new product developments, technological upgradations, and innovation. The group pioneered the information technology industry in India with the launch of Tata Consultancy Services (TCS) in 1968. In 1998, the group's auto division Tata Motors developed India's first indigenously developed car, the Indica. In 2008, Tata Motors received global attention by unveiling the world's cheapest car, the Nano, by trying out several innovations, different design specifications, and engineering changes, to keep the costs low.
The group had redefined growth after Ratan Tata took over as Chairman of the Tata Group in 1991. He restructured the businesses of the Tata Group and expanded the group globally. The first major instance of inorganic growth was exemplified when the group's Tata Tea (now Tata Global Beverages) division acquired UK-based Tetley in 2000. This was followed by a series of acquisitions by the group. Some of the notable acquisitions were Tata Steel acquiring Corus3 in 2007 and Tata Motors' acquisition of Jaguar and Land Rover4 in 2008. Analysts pointed out that though the group had recorded increased revenues due to inorganic growth, it also had to deal with the challenges of integration and proper management of the portfolio of companies.
Going forward, the Tata Group continued to follow its inorganic growth strategy. In March 2012, the group's telecommunication division, Tata Communications, announced its plans to acquire UK-based telecommunication company, Cable & Wireless Worldwide Plc. The deal was expected to strengthen Tata Communication's position as a provider of under-sea fiber optic and business communication services provider globally.
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