Cyrus Mistry made Ratan Tata…, his decisions were…; book reveals SHOCKING details about Mistry’s exit from Tata Group
Cyrus Mistry made Ratan Tata…, his decisions were…; book reveals SHOCKING details about Mistry’s exit from Tata Group
As per the book, Ratan Tata, despite his differences with Cyrus Mistry, tried to help him successfully perform his duties.
The rivalry and the rift between Ratan Tata, the late Chairman Emeritus of Tata Group, and the conglomerate former head, Cyrus Mistry, has been well documented. However, a new book has unveiled more shocking details about issues between Ratan Tata and Cyrus Mistry, revealing how the late industrialist regretted his decision to back Mistry’s ascension as the Tata Group chairman.
As per the book, Mistry’s appointment was ‘circumstantial’ as the selection committee failed to pick another suitable candidate, and ultimately chose Mistry to helm the top post following an interview.
Mistry made Ratan Tata ‘uncomfortable’
According to the biography, several decisions taken by Cyrus Mistry after being appointed as the Tata Group chairman, made Ratan Tata ‘uncomfortable’ as he felt these went against the clean image and reputation of the group. The book details how apprehensions arose when Mistry drove Tata Group into new ventures outside its core areas, such as infrastructure, where “bribes and corruption” could tarnish the Tata name and reputation.
On the group’s failed joint venture with Docomo, when the Japanese telco won an award of $1.17 billion, which Tata refused to pay, Ratan Tata is quoted as saying: “If it has (Tata Group) made a commitment, it has to in good faith implement it.” The book reveals that Ratan Tata travelled to Singapore in 2017 to personally meet Docomo president, and paid the promised $1.17 billion owed by Tata, when N Chandrasekaran took over as the Group’s chairman.
Cyrus Mistry didn’t consult Tata Sons board
According to the book, discontent grew between Cyrus Mistry and Ratan Tata when Mistry reportedly bypassed Tata Trusts on important decisions concerning the Tata Group. Ratan Tata admits he “misjudged Mistry’s approach to business”, and how acquisition of Welspun’s alternative energy assets by Tata Power for $1.45 billion, which lacked approval from the Tata Sons’ board was a “real flare-up”.
Additionally, Cyrus Mistry’s modus operandi as chairman has been commented on by several Tata Group veterans, like current Chairman N Chandrasekaran, who recalled how Mistry’s group executive council (GEC) only comprised of youngsters and ignored veterans.
“Wisdom with experience is more sustainable,” says R Mukundan, MD of Tata Chemicals, while NP Sinha, former vice-president of Tata Steel puts it more bluntly, saying “his appointment itself I would not have done”.
Ratan Tata tried to help Mistry
As per the book, Ratan Tata, despite his differences with Cyrus Mistry, tried to help him successfully perform his duties, tasked Nitin Nohria, the dean of Harvard Business School, to ‘guide’ the then Tata Group chairman. “Nitin, you have one job, and that is to see if there’s any way in which you can help him (Mistry) be successful,” Tata had told Nohria, who was incorporated into the Tata Sons board.
However, Ratan Tata’s move as rumours began that he was “stifling the new chairman’s performance” and interfering in his work. Soon, the ties between Ratan Tata and Cyrus Mistry took a nosedive and the internal bickering also led to a dip in the Tata Group’s performance.
In October 2016, Cyrus Mistry was ousted as the chairman of Tata Group, and Ratan Tata knew that he “he would be misunderstood” for the move, and his reputation would take a hit, but he did it anyway because it was the right thing to do to protect the Tata name and reputation, the book reveals.
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