The Leadership Role In Tata Group Commerce Essay


Leadership is integrated part of our life. According to corporate chief and former US presidential candidate Ross Perot, "the principles of leadership are timeless because, in a rapidly changing world, human nature remains a constant". We all experience leadership in our life from early childhood in our families, through friendships, social, recreational and sports activities, school and higher education, to politics and government, and, of course, in our work, we all recognize leadership in other people and often in ourselves. In government, global corporations and small businesses alike, the leadership role is becoming more demanding, more open to scrutiny and more difficult [Roger Gill].

The development of leadership theory also parallels the development of organizational theory. The bureaucratic form of organization is characterized by 'laissez-faire leadership' - whereby so-called leaders tend to avoid taking a stand, ignore problems, not follow up, and refrain from intervening - or transactional leadership, in which leaders practise management by exception, focusing only on deviations from what is required, and contingent reward, rewarding people (either materially or psychologically) for achieving what is required. The emergence of the post-bureaucratic form of organization in the late nineteenth century reflects the development of the concept of transformational leadership.

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Theory & Approaches to Leadership: Number of Leadership theories and approaches has been evolved on the basis of Style, Trait, Behavioural, Transformational, Situational and Charisma. Many researchers made efforts linking some of the theories across these leadership approaches. But each model has its own pros, cons, assumptions and limitations. Latest researches are conducted on Situational & Transformational leadership styles. Leadership gurus presented new models as variations to the already existing models. Max Weber, MacGregor, Bernard Bass, Warren Bennis & Nanus are few important researchers in the area of transformational leadership. Understanding the difference between transactional and transformational leadership is vital in getting the whole concept of transformational leadership theory.

In general, a relationship between two people is based on the level of exchange they have. Exchange need not be money or material; it can be anything. The more exchange they have the more stronger the relation. Manager's expects more productivity from employee in order to give good rewards. In this way, if something is done to anyone based on the return then that relation is called as 'Transactional' type. In business, leaders announces rewards in turn to the productivity. These relations are all about requirements, conditions and rewards. In life, at one point of time, things happen without expectation from other side. Say, mom's dedicated service to her kid. Mom doesn't expect anything from the child and the service she provides in raising the child is unconditional, dedicated, committed. Mom plays a major role in shaping up the kid's future life. This type of relation is called as 'Transformational'. Leaders do exist in this world with these behaviours. Transformational Leaders work toward a common goal with followers; put followers in front and develop them; take followers' to next level; inspire followers to transcend their own self-interests in achieving superior results.

Leadership Approach in TATA Group:

TATA Group founded in 1868, is an Indian multinational conglomerate headquartered in the Mumbai, India. The Group has 500,000 employees spread over six continents (more than 80 countries). TATA Group has market capitalization worth $70bn as of today and is the largest private corporate group in India. TATA Group is biggest employer in UK, employing more than 50,000 people. TATA Group has interests in communications, IT, engineering, materials, services, energy, consumer products and chemicals. Its chairman, Ratan Tata is one of India's and the world's most influential person right now. The Tata Group is known for its good business ethics and corporate governance.

The Group leadership style has been quite consistent from its existence. The Group has incorporated some more leadership changes which are essential in current century to drive towards more competitive. In terms of leadership style, TATA Group has adopted a team-led culture.

With Ratan as a leader, the management style of the entire group changed, trust became a huge facet and theme of the group. Ratan put in a complete organisational restructuring in place when he took over taking a more matrix-style approach building teams, replacing many of the senior managers with younger ones and bringing the retirement age of senior managers to 65 from 70 years. These changes would have obviously transformed a lot in the business, senior managers would have had to be on their toes and flexibility and adaptability became essential qualities to have. The leadership changed from a centralised, command centre to a much more distributed form with employees and all managers enjoying greater responsibility and knowledge about the Group, which would have in turn; motivated them to work harder and as a group. From distinctive Leadership models available such as the McGregor Theory X and Y; where a theory X manager believes workers dislike work, are not creative and avoid all responsibility while a theory Y manager believes that workers get as much enjoyment from work as they can derive with leisure, accept responsibility and are creative; it can be seen from this, that Ratan wanted all his managers to be modelled as closely to Theory Y and he himself could be called a Theory Y manager. He encouraged managers to be innovative and share all their ideas, consulting actively with them and giving them more responsibility and importantly encouraged team-working. Using standard leadership style models of Autocratic, Democratic, Paternalistic and Laissez-faire, Ratan Tata can be described as the leader who employs a more democratic approach but also uses facets of the other three models, a perfect leader in my view. He is democratic because he encourages communication and participation, and workers have access to some of the knowledge of the business. However, he is also paternalistic in a way, because he cares greatly about the well-being of his employees as was evident because after the 26/11 terror attacks, he personally visited each affected employee's residence (80 in total) which shows he does have a humanistic touch to his leadership as well. He is autocratic in certain ways but only when needed especially when quick and informed decisions have to be taken, but he is never too commanding in his nature, being a man of few words and being more of a man of action, this is evident from the manner he aggressively pushes for bold international deals, such as during the global acquisitions of business powerhouses such as Corus, Jaguar and Land Rover, and Tetley Tea. This quote from Mr. Muthuram, another executive director, clearly shows that he is a man, who is intent on succeeding and is sure of himself,

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"Ratan was the chief architect of the Corus deal. I was worried about the magnitude and the amount of money.

But he instilled confidence."

He also uses facets of the Laissez-Faire model such as the delegation of important duties and decision-making, he also does not in any way interfere with any manager's functioning, he might make a broad strategic assessment but he does not interfere in operational issues and details, this shows that he has complete trust and faith in his managers and believes in their ability, this quote from Mr. Gopalakrishnan, an executive director of the company, shows how much value Ratan Tata places on his trust, this can be highly motivating for managers and workers alike,

"I remember what Mr Tata told us at a meeting. He said that he will continue to trust all his managers, but once they lose that trust, he will go after them. I think that is a very fair deal"

Looking at other leadership models, such as Max Weber's Transactional and Transformational Leadership models, where a leader is classed in three brackets which are Bureaucratic, Charismatic and Traditional, where a bureaucratic leader is one who is always bound by the set rule and does not want to tread beyond them; a Traditional leader is one who does and follows everything from a long past or history and always loyally obeys these 'traditions'; a Charismatic leader is one who uses his own laurels or abilities to inspire and is one who can be described as radically opposed to administrative rules and legal principles. From these models Ratan Tata easily falls into the Charismatic Model because he is one who leads by example, coming up with highly innovative ideas such as the one lakh car the 'Nano', budget hotels or low-end watches, he brought radical change to the Tata Group as a whole, changing it from its 'Traditional' mindset to new more flexible and adaptive cultural mindset.

One can also look at Bennis and Nanus's Transformational leadership model which states that transformational leaders make their followers into self-empowered leaders and their main focus is to articulate vision and values clearly so the newly self-empowered leaders know where to go; it then talks about the four I's of Transformational leadership which are

Idealised Influence ( being a role model)

Inspirational Motivation( cultivating a team spirit, motivate and provide a challenge)

Intellectual Stimulation( Innovation and creativity)

Individual Consideration(mentoring and providing support for followers)

Ratan Tata can be then described as a complete transformational leader, because he epitomises all the I's and is clearly a man with a great vision; he changed the business culture to one that is team-based, he empowers all his managers and executives and has complete faith in them, he is extremely innovative and is credited for much of the Group's new products, he places a great deal of importance to his Research and Development department and he definitely cares deeply about the welfare of all his employees and managers, which was demonstrated during the 26/11 terror attacks that hit Mumbai and targeted one of his hotels. He is a visionary and proof of this comes from this quote,

"One hundred years from now, I expect Tatas to be much bigger, of course, than it is now. More importantly, I hope the group comes to be regarded as being the best in India. Best in the Manner in which we operate, Best in the products we deliver, and best in our value system and ethics. Having said that, I hope that a hundred years from now we will spread our wings far beyond India, that we become a global group, operating in many countries, as Indian business conglomerate that is at home in the world, carrying the same set of trust as we do today"

Ratan Tata is a leader who realised the kind of market his businesses were in competitively and always wanted them to be up to date in all their processes and technology. This famous quote from his lips is proof enough of this fact,

"A company or business which remains static is a business that will die; a company that constantly changes and accepts that there are better ways to do things than the way they are done today, is a company that will survive in the global market that we face."

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From this statement we can figure that he is a fierce competitor and a man who understands the market he faces. Ratan Tata. He is also a very deep thinker and a brilliant strategist as is described by one of his Executive directors, Mr. Alan Rosling,

"He is a deep thinker and extremely strategic. He is always 2-3 steps ahead"

Another important quality that Ratan Tata has is that he is a man of strong Integrity and principle; he never compromises on his ethics and does not deal with any business or company that compromises them and values his shareholders very highly , another quote from Mr. Gopalakrishnan shows this fact,

"Tata has shown that there is no other way he will do business other than do it ethically"

There is evidence of this fact from the incident when the finances of Tata Finance were in huge losses due to financial faults made by senior officials; Ratan announced that the holding company they owned would provide the necessary finance needed for the unascertained losses, thus giving shareholders their dividend. His personality is reflecting in the Group's reputation and giving them a good global image.

I choose Ratan Tata because I feel he is a complete leader and he is someone who definitely has transformed the face of the Indian business world, he is someone who never compromises on his ethics and principles and has set a strong value system for the Tata Group as a whole, in a country where ethical and value-orientated business is never a top priority. He is someone who epitomises the complete leader with all his qualities; he is a man of great integrity and dignity, and he is also a champion of social causes with his the Tata Foundation being the largest charitable organisation base in the country, and he is a man of modesty who never likes to take credit for anything even if it does completely belong to him.

Critically evaluate what is the relationship between Prediction Markets and the concept of Open Innovation.

Answer to Question 2:

There is a very strong fundamental relationship between Prediction Markets and the Concept

Question 3:

Discuss whether and to what extent business organisations can make use of Prediction Markets and critically evaluate what are the necessary modifications that organisations have to put in place in order to profit from the use of Prediction Markets.

Answer to Question 3:

In comparison with traditional methods to demand forecast, Prediction Markets provides

Appendix: Reference List markets ""ml

Rhodes, Paul W. and Koleman Strumpf, "Historical Presidential Betting Markets," Journal of Economic Perspectives, 18(2), 127-142, 2004.

Kunz, Ben, "Prediction Markets Meet Wall Street," BusinessWeek (Oct. 14, 2008)

Consensus Point, "What is a Prediction Market?" (Web site accessed April 1, 2009). ," uses a "prediction market" to "unleash the collective wisdom of organizations and helps them gain a more accurate picture of what is going on in their organization and the industry," according to Ron Hoffner, associate, Ingenix Consulting