Focus on business, market leadership: Tata to top execs
Says the drive must be on leadership rather than following; group’s longterm interest to be top priority
A day after Cyrus Mistry’s ouster as chairman of Tata Sons Ltd, interim chairman Ratan Tata on Tuesday asked the senior management of the $100billion conglomerate’s firms to focus on their businesses without being concerned about the toplevel change.
Continue with the plans you have been working on, was Tata’s message to the group’s top executives. “We will evaluate and continue to undertake those that are required to. If there is any change, they will be discussed with you,” he said in his statement released by the group shortly after the meeting held at the iconic Bombay House.
“The (group) companies must focus on their market position vis-à-vis competition, and not compare themselves to their own past. The drive must be on leadership rather than to follow. I look forward to working with you as we have worked together in the past. An institution must exceed the people who lead it. I am proud of all of you, and let us continue to build the group together.”
“It showed Tata’s focus on getting back to work and not been affected by boardroom developments,” said a person aware of the details of the meeting.
The meeting lasted 25 minutes, Bloomberg reported, adding that Tata didn’t disclose reasons for replacing Mistry. The report cited a person with direct knowledge of the matter as the source for the information.
According to separate reports, Tata also told CEOs that it was “not an ownership battle”, and the group’s long-term interest will be top priority.
This is the first time that the 78-year old Tata has spoken after issuing a terse statement on October 24 informing employees and other stakeholders, about the Tata Sons board’s decision to remove Mistry as chairman.
He also reiterated that he had assumed the role of interim chairman for stability and continuity so that there is no vacuum. “This will be for a short time. A new permanent leadership will be in place,” he emphasised.
Tata Sons has already announced that a Selection Committee has been constituted to choose a new chairman, and will complete its mandate in four months.
Meanwhile, Tata Group stocks on Tuesday ended up to 3% lower, with key firms losing ₹10,700 crore collectively in market capitalisation. Shares of Tata Steel fell 2.5%, Tata Power lost 1.5%, Tata Consultancy Services slipped 1.2% and Tata Motors went down 1.1% on the Bombay Stock Exchange.
“At a business level, life doesn’t change for us due to this management rejig,” said a senior banker and frequent investor in Tata group’s bonds. “What we need to see is what kind of strategy they will adopt now to revive their weak companies.”