Shyamsunder Panchavati

Shyamsunder Panchavati
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Thursday, October 27, 2016

Tata Board has decided, Now its Cyrus Mistry turn, an insight into the situation. 10-27

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After four days, what I find is the entire episode is getting less and dignified. The narrations are dipping in quality from both he sides. High end dignified mudslinging has already started from both the sides. What is getting hurt maximum is the Tata culture and the reputation..

It is time some good Samaritan having influence with both the parties mediates and tries to workout a compromise acceptable to both. India cannot see and tolerate Tata culture and reputation being injured.   

I pray to god that the value, reputation, and the culture, so laboriously built over centuries by Jamshedji, Ratan Tata Sr, Dorabji Tata, JRD, Naval Tata and others are protected by the scions. Shapoorji Palloonji are the largest minority share holders of the Tata group. they have been associated with the group even before Ratan Tata joined the Tatas.

At least they should convince their heir Cyrus Mistry to keep it dignified. I hope that happens.

I hope this happens.....








The sudden and unprecedented decision of Tata Board to sack its Chairman Cyrus Mistry has
surprised many and raised questions among the people. Cyrus Mistry on his part is determined to fight the decision. His letter to the trustees, which is now public, gives a totally new angle to the whole incident.

I have gone through various articles and opinions on this subject. I am presenting my take on the whole issue. I will be happy to have your opinion on this post and subject itself.

I feel the decision has more to do with mindsets and thinking, a choice between pragmatism and retaining the conservative culture. Some of the Tata companies have existed for long more because of their values contribution to Tata culture than profitability.

Even during JRD's regime, out and out profitability was never the intent or the procedure of Tata Business Culture. Many business decisions are made more with Tata pride in mind.

Even during the nationalisation of the Airlines industry in 60s. While Birla closed down his airline as a prudent business decision, Tata allowed his airline to be nationalised. Patriotism more than business priorities dictated his decision.

The unmistakable Tata culture was associated more with national pride than the business expediency. The second example is the Singur Nano project, where the Tatas preferred to lose Rs. 1,400 crores than comprising on principles.

I am citing these reasons just to make the point that, business inefficiency or incompetency couldn’t possibly have been the reason for the ouster of Cyrus Mistry.

Was he too pragmatic to suit the conservative Tata culture???

Was his decision to value add to the stockholders’ investment by disposing off non performing or low performing assets considered a negative reflection on Ratan Tata’s performance???

Did the board think that this would hurt Ratan Tata’s reputation or ego???

Ego clash seems to be the reason or at least one of the most important reason for the decision.

Fact of the matter is that, the transition itself was not as complete as between JRD and Ratan Tata. After handing over responsibility JRD retired totally from business, whereas Ratan Tata was still active after the transition as Chairman emeritus. Cyrus Mistry insists that there was huge interference from Ratan Tata in his work and the airlines deal was forced on him against his will.

This being the situation, I don’t think aspirants like Indira Nooyi, Chandrasekharan, or Arun Sarin could win favour from the selection committee or comfortably work unless they are assured freedom and independence in decision making, which given the present culture in Tata group may not be possible to the extent required. Noel Tata as of now being a Tata family member would be considered more in line with or more inclined towards Tata Culture.

Next four months would tell us the criteria the Tatas consider most important for the job.

Fingers crossed, and waiting inquisitively….

Best wishes,

Shyam

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