Risk-taker's dream
The Week — February 8, 2007

"We need to be bolder and willing to take bigger risks abroad," Ratan Tata had said to THE WEEK in an interview in May 2005. That was at a time when the Tata group had taken a big leap abroad with acquisitions by Tata Motors and Tata Steel. It had also become the third largest player in the world in the branded tea business. Tata Motors' acquisitions in Korea and Spain in 2005 made it the world's fifth largest truck maker and the third largest bus chassis maker. Tata Steel's buy of Singapore's NatSteel did not add much to capacity, but made it a strong regional player.

Perhaps, Corus was on the Tata radar even then. Perhaps Ratan Tata had an inkling that Tata Steel would grow from being a regional player to a global one, practically overnight, when he said, "I am sure at some point we will go beyond the Tetley scale." For the Tata group, the objective of this aggressive expansion abroad is not just acquisition for the sake of acquisition. "Going into select geographies is not just to exploit commercial opportunities but where the group will have a development role in that country," Tata had said.

In all its acquisitions, local managers have remained, with Tata Sons people on hand to provide guidance and to ensure corporate governance. "We are far more tolerant of differences than many American and eastern companies," Alan Rosling, executive director, told The Week then. As the group's footprints in foreign markets have grown, Tata Sons, which owns a controlling interest in the bigger group companies, has been building a philosophy to institutionalise the process. Templates and models for institutionalising the group support for such acquisitions are now in place.

"We have created a very small group to look at our growth internationally," Tata said. An important criterion for the top team is how well the acquired company will fit into the Tata value system. "Chemistry is an extremely important issue," Tata said. "We do a lot of homework to make sure the acquired company fits into our culture and value system. If we find that a company follows practices that we are not in agreement with, we would not go into it."

As the group grows across geographies, it is getting noticed for its quality, pricing and services. Emphasis rests as much on gaining mind-share for the group as on gaining market share. "We have created a common brand and built brand discipline," said Tata, when asked about making brand Tata an international one. "Now we are spending money to promote the brand in the countries we are in.... The group now has more visibility, we are less shy of the media and we have more media coverage." That is certainly true of the Corus acquisition.