Tata Group: India's GE?

Since its early years under Thomas Edison and to this day with Jeffrey R. Immelt, General Electric (GE) has been one of the most important companies in the U.S. industrial sector. GE's has rich corporate history has led it to its current state as a very big conglomerate with business in media, commercial finance, consumer finance, healthcare and industrial infrastructure. All this enables it to develop, manufacture and market a variety of products which range from aircraft engines to cutting edge health care systems to electricity. These capabilities and successes combined with world class management and sincerity towards corporate citizenship have maintained its position among the world's most admired companies.

Look at India's corporate culture today, one can't help but notice the striking similarities between GE and Tata Group. Since founded by Jamsedji Tata, Tata group has been in the forefront of the Indian economic landscape. Tata Group undoubtedly enjoys position numero uno among Indian corporate houses. They have business interests from telecom to automobiles, software to cement, investing to hotels, tea to steel. Just like GE, Tata also command respect not only because of being a big industrial house but also because of being agents of change in India.

But there is one striking difference between the two: GE is a much bigger corporation than Tata. Slowly but surely this difference is fading. Mr. Tata's current push to take his group of companies to the top of the Indian market can not be overlooked or overstated. The seeds of change and desire to be top global companies can now be seen throughout Tata Group.

Tata Steel is now world 5th largest steel company thanks to the acquisition of Corus; with brands like Tetley & Good Earth, Tata Tea is second largest branded tea player globally; Tata Motors (TTM) with Nano and Indica car designs under its belt is taking a shot at JLR; Indian Hotels is also gunning for a tie-up with Oriental Express Hotel to be a top player in the hospitality sector. TCS is already India's number one (and hence worlds) top s/w outsourcing company having big plans in areas of business consulting, engineering design services and KPO/BPO sectors.

Tata group companies have changed at a remarkable pace in the last couple of years. The shift is not only in the range (local to global) or sectors (traditional to high growth) but also in the manner in which they operate. The Tatas are changing from been a slow paced business house to a much more nimble corporation. The aim of Tata Group has changed from being the best in India to being among the top players in the world.

To achieve this, they are changing their old conservative business approach for a new one. The Tatas now seem to be ready to play the game by a new set of rules. From solely utilizing its internal resources and its own reserve cash flow for growth, they are ready to take a shot at the top slot using much higher leveraged positions, external debts and tie-ups. All this change might actually look risky especially in current times of financial turmoil, but if successful will give India its own General Electric sooner rather than later.

Disclosure: Long

Comments

[RG]

I had the opportunity to work as a vendor with Tata Telecom in India last year. One of the most promising aspect I noticed was the core value of Ethics within the company. Stark difference between other vendors where the ethical line most of the time is a blur.

[AlphaRomeo]

Jamsetji Tata was also the first Indian to own a car. Read about TATA family here