Professional Documents
Culture Documents
3-Cyrus Mistry Vs Ratan Tata, A Valuable Lesson For B-School Students
3-Cyrus Mistry Vs Ratan Tata, A Valuable Lesson For B-School Students
3-Cyrus Mistry Vs Ratan Tata, A Valuable Lesson For B-School Students
Mistry vs Ratan Tata, a valuable lesson for Bschool students The Economic Times
Cyrus Mistry vs Ratan Tata, a valuable lesson for Bschool
students
By Devina Sengupta & Sreeradha Dasgupta Basu, ET Bureau | Nov 03, 2016, 10.51 AM IST Post a Comment
MUMBAI: The boardroom war at the Tata Group is providing unexpected, and probably
some of the best, live lessons for business schools to teach.
The ouster of the Tata Sons chairman and the tiff over it cover almost every point one can
teach in business schools today, from corporate governance to conflict management and
succession planning, say professors at some of the top Bschools such as Indian Institutes
of Management, Indian School of Business and Management Development Institute.
“In the case under development — the ouster of Cyrus Mistry — we plan to focus on the
issues related to ownership rights and managerial rights; in a listed firm, the former does not
automatically afford the latter,” said Ramachandran J who teaches corporate strategy and Among the many takeaways from this saga, said the professors
ET spoke to, is how familymanaged businesses should handle
policy at IIMBangalore.
succession successfully.
Also Read: Why TCS CEO N Chandrasekaran is the favourite for the post of Tata Sons Chairman
This, Ramachandran said, will help him teach his class the difference between a business group and a conglomerate. For instance, the job
of the group chairman at Tata Sons is not the same as that of the chairman of General Electric. This is because GE is a single legal entity
in which all the businesses of the diversified portfolio (aerospace, medical, lighting, etc.) are housed, whereas the Tata Group is a
“collection” of legal entities (for instance Tata Steel, Tata Motors and Tata Chemicals) with each having a relatively focused portfolio. The
case study at IIMB will also focus on the impact on different businesses when someone is removed from the chairman’s post, but not from
the board.
At his class in IIMCalcutta, Anirvan Pant, associate professor of strategic management, plans to discuss whether it was enough to engage
as a chairman just on the strategy dimension or should one look at both strategy and creating an identity for the group. Another topic is on
how top leaders decide on the right candidate.
Kavil Ramachandran, executive director of the Thomas Schmidheiny Centre for Family Enterprise at ISB, said developments at the Tata
http://economictimes.indiatimes.com/news/company/corporatetrends/cyrusmistryvsratantataavaluablelessonforbschools/articleshow/55213511.cms?… 1/3
11/3/2016 Cyrus Mistry vs Ratan Tata, a valuable lesson for Bschool students The Economic Times
Group have provided several learning opportunities.
“We will be introducing them appropriately in our courses, particularly in the MFAB, the MBA on family business. Some of the current
developments get embedded immediately in various courses. There will also be discussions of complete case studies in the future,” he
said.
Also Read: Ratan Tata ropes in old confidant in a newly created chairman's office to steer operations
It is early days yet, but discussions will cover corporate governance, functioning of board of directors, employment of nonfamily CEOs,
succession management and role of nonoperating owners, Ramachandran said.
Among the many takeaways from this saga, said the professors ET spoke to, is how familymanaged businesses should handle
succession successfully. The selection of a successor, his induction and the clarity that a nonfamily CEO should get will also be talked
about with students.
These classroom teachings can become sufficient fodder for both professors and students to develop case studies. “When a case is
written on this, it can be used brilliantly to illustrate the problem of governance, succession planning, economic value added, ethics versus
efficiency and the role of culture in organisations,” said Ajit Prasad, the director at IIMLucknow.
“This is an excellent and very holistic case to cover a range of issues including leadership, corporate governance, organisational culture,
divestiture, vision and mission and also the fiduciary duty of the board,” said Veeresh Sharma, chairperson, strategic management area at
MDIGurgaon.
“These would provide great learnings for the strategy class.”
Stay on top of business news with The Economic Times App. Download it Now!
Tata Group stocks performance after Mistry joined
NSE BSE
Price Change % Change
Company Name
(Rs) (from 281212) (from 281212)
Tata Metaliks Ltd. 374.70 312.90 506.31
Tata Elxsi Ltd. 1271.75 1042.20 454.02
Voltas Ltd. 369.95 264.85 252.00
Tata Communications Ltd. 624.35 387.50 163.61
Tata Sponge Iron Ltd. 584.20 273.75 88.18
Tata Consultancy Services Ltd. 2311.15 1043.65 82.34
Indian Hotels Company Ltd. 113.40 50.30 79.71
Nelco Ltd. 88.40 37.05 72.15
Tata Motors Ltd. 518.80 208.75 67.33
Tinplate Company of India Ltd. 82.95 30.80 59.06
Trent Ltd. 203.20 74.87 58.34
Tata Chemicals Ltd. 528.55 178.85 51.14
Rallis India Ltd. 216.40 66.15 44.03
Titan Company Ltd. 379.70 98.55 35.05
Tata Investment Corporation Ltd. 580.10 116.45 25.12
TRF Ltd. 267.20 42.55 18.94
Tata Steel Ltd. 409.60 18.95 4.42
Tata Coffee Ltd. 126.00 14.22 10.14
http://economictimes.indiatimes.com/news/company/corporatetrends/cyrusmistryvsratantataavaluablelessonforbschools/articleshow/55213511.cms?… 2/3
11/3/2016 Cyrus Mistry vs Ratan Tata, a valuable lesson for Bschool students The Economic Times
Tata Global Beverages Ltd. 133.15 27.30 17.01
Tata Power Company Ltd. 78.00 31.25 28.60
Tata Teleservices (Maharashtra) Ltd. 7.10 3.62 33.77
Live Market News Portfolio Mobile Live TV Newsletter Commodities Speed QnA Blogs Alerts RSS
http://economictimes.indiatimes.com/news/company/corporatetrends/cyrusmistryvsratantataavaluablelessonforbschools/articleshow/55213511.cms?… 3/3