TATA MOTORS SINGUR CASE

In 2006, the TATA Motors group launched its ambitious small car project, Nano, from Singur in West Bengal. Their decision to invest in Bengal was greeted with much anticipation and expected to mark a new beginning for the troubled industrial sector. However, TATA Motors eventually had to scrap their decision and pulled out of West Bengal owing to the power dynamics that were involved and relocated to Sanand, an industrial hub in Gujarat. The decision to pull out cast a cloud over future industrial investments in West Bengal as enterprises were expected to be wary and hesitant of putting their money at stake in wake of what happened with TATA group.

Trinamool Congress

Mamata Bannerjee, leader of Trinamool Congress, led an agitation asking TATAs to return 400 acres of the total of 997 acres allocated by West Bengal state government for the Nano project. The state government, TATA group and protesting farmers were involved in a series of negotiations all of which failed leading to TATAs exit from West Bengal. Ratan Tata, then chairman of the TATA Group, held Trinamool Congress as the most significant factor behind their rationale to exit. In a statement issued by Ratan Tata, the TATAs claimed that from 2006 to 2008, their employees were subjected to assaults, intimidation and constant threats leading to disruption in working of the plant. Mamata Bannerjee, however, termed the development as a joint game plan between TATA group and the Left Government. She refused to accept the claim of TATA group and stated that passing the blame on her part was erroneous. She also backed her philosophy that agriculture and industrial development can co-exist on a piece of land. The hunger for power was the main driving force behind the exercise. Mamata Bannerjee exercised the role of a firebrand, visionary leader and drew on her legitimate and referent power as per French and Raven Model to inspire and motivate the party workers. Her party romped to power largely on that momentum it gained by winning the trust of farmers and underpriveleged.

CPM

In 2006, the then CPM-led state government had acquired 997.11 acres of land in Hooghly district's Singur, besides Durgapur Expressway, about 50 km from the state capital Kolkata, for the Tata Motor's Nano factory The CPM State Government decision to allocate land in Singur was later criticised by its own party based on their internal investigations. CPM Hooghly district committee observed that the "decision to set up Tata's factory at Singur was decided without any knowledge of the district party" and even the plant was given permission to be set up in a place which was traditionally known as an "anti-Left area", where Trinamool had considerable "political might". "Trinamool already had seven seats in the panchayat where the plant was to be built. At that time, Trinamool had only 2 seats out of 19 assembly seats one of which was Singur. The report prepared by the committee also lay blame on the then Chief Minister Buddhadeb Bhattacharjee and his Industry Minister Nirupan Sen, who were bestowed with power, stating that "it was not known whether the leadership had given right direction" in the wake of "heightened opposition" against setting up of the factory. The leadership was also criticized for delay in announcing revised compensation packages for those farmers who had refused to relinquish their land. West Bengal traditionally had a fragmented farming model which the government ignored by not providing compensation to subcontractors. Although adequate compensation was given to farmers, no sustainable modes of financing like microfinancing were provided. Lack of planning while allocating land was evident as the state government was in a tearing hurry to ensure that TATA group invested in Bengal only and not in any other state. Jobs in the plant were promised to the displaced farmers as the government made concerted efforts to deliberately project Bengal as an investment-friendly destination. Public spats, infighting and face-offs between warring factions became order of the day as internal politics were played out as CPM became a divided house in the wake of weak and uninspiring leadership. The leadership which had drawn upon its legitimate, expert and referent power earlier, as per French and Raven model, now drew flak both internally and externally.

Power Dynamics

Power when bestowed upon individuals can be enabling facilitating greater good for majority or corrupting leading to fulfilment of vested interests. Power can be suitably exploited by leaders to engage and support activities that they normally would have refrained. When the actions of an individual bear no relationship to the legitimate organizational activities, power is deemed to be a corrupting influence. However, if power is utilized by leaders to improve the efficiency and effectiveness of performance of subordinates, power is deemed to have an enabling influence. Abuse of power leads to ethical dilemmas which do not have any direct concrete answers. In organizations, leaders are trained to develop their power bases in order to run the organization. However, individuals are ethically bound and urged to consider the impact of their power on others. In order to manage such situations in an effective manner, a leader must determine how much inter personal power is required to direct the behaviour of others. Excess of inter personal power can damage working relationship between leaders and followers. The TATA Motors case is an example of power dynamics that led to their exit from Singur.