Dear Mr. Ramkumar,
Appreciate your response to my comments. I agree with you that it is not uncommon to oust a CEO and I myself witnessed a couple of such incidents both in India and the USA. But the manner in which it has been done is what is questionable and that's what is going to define the benchmark / precedence for good or bad governance. That too such a decision after 4 years of tenure!!! There seems to be much more than what meets the eye and being an outsider, it hurts a lot because another outside, who will fill the position, will definitely think a hundred times before entering into such an area. That's what I thought I conveyed through my earlier posts.
Best regards
R. S. Prasad,
Co-founder & Executive Director
Career Metrics Private Limited
+91-94482 26663(M)
Hyderabad & Bangalore
On Monday, 31 October 2016 3:02 PM, R Ramkumar <ramkumar100@hotmail.com> wrote:
Dear Mr Prasad,
With respect to your comments, incidents like sacking a CEO is no trivial matter. It could be an unprecedented situation that may compel such an action....a gangrene like situation. You may like to ponder the damage any continuance would have done....may be much more. Employees in such organisations would know more than outsiders the internal DNA of the management philosophy. An effective internal communication could send the right message in fact enhancing the morale if employees...Ramkumar
Sent from my Samsung Galaxy smartphone.
-------- Original message --------
From: "'Prasad R S' via Management Teachers Consortium, Global" <join_mtc@googlegroups.com>
Date: 31/10/2016 11:28 am (GMT+05:30)
To: join_mtc@googlegroups.com
Subject: Re: [MTC Global] Sudden Removal of Cyrus Mistry from Chairmanship
There can be only one set of Ethics in corporate governance. There can not be Ethics specific to TATA culture or some other culture. The manner in which the ouster is initiated is questionable and it will hit the brand very hard in future. If the top management (having served at that level for 4 years) is meted with such a treatment, imagine what would be the fate of a normal employee. Mistakes are not uncommon, but lessons not learnt from mistakes prove costly. May be the beginning of the fall!!!
Thanks
R. S. Prasad, PMP®
FC--funder & Executive Director
Career Metrics Private Limited
+91-94482 26663(M)
Hyderabad & Bangalore
On Sunday, 30 October 2016 8:03 PM, R Ramkumar <ramkumar100@hotmail.com> wrote:
Mr Paranpe & Ms Usha,
Your expressions on Cyrus episode are thought provoking. There are 3 actors in the saga. The Board, Ratan Tata & Cyrus Mistry. Ratan Tata could never have taken some unilateral decision to nominate Cyrus as his successor. The Board & the Selection committee would have done due diligence on the professional & personal characteristics of Cyrus. Also, the nomination could have been preceded by deliberations between the key players...though may not be in the public eye.
Tatas have core values which they assiduously protected & promoted over decades.They believe that managerial excellence is not limited to earning profits but also in attempts to minimise & mitigate risks. It's a process they have adopted and not the mere actions in response to crises. Tata Chemicals....is an example. In the context of Cyrus, it may be surmised that his corporate values were found to be diametrically opposite those of Tata 's. Curtailing budgets for charity for instance. Even, the personal style of Cyrus in failure to seek consensus on the Docomo affair, is the last straw on the camel's back. Are these actions a reflection of Cyrus' motive or motivation, is a mystery.
In conclusion, Tata's failure in the selection of Cyrus is as much a fact ad Cyrus' all round failure with Tata's. ...Ramkumar (09821097788)
Sent from my Samsung Galaxy smartphone.
-------- Original message --------
From: Usha Gowri <usha.gowri@gmail.com>
Date: 30/10/2016 11:19 am (GMT+05:30)
To: join_mtc@googlegroups.com
Subject: Re: [MTC Global] Sudden Removal of Cyrus Mistry from Chairmanship
We forget one basic principle of life: or maybe two:
one ,a person can change.
Two,to believe someone knew Mr Mistry like the back of their hands and therefore can predict the human mind-well...
Why do we think Tatas cant make a mistake.Why?
Usha
My competition is not against the runner next to me.It is against the runner inside of me.
Let go or get dragged.: for "The only way to make sense out of change is to plunge into it, move with it, and join the dance." — Alan Watts
On Sat, Oct 29, 2016 at 11:47 AM, kiran paranjpe <kdparanjpe@rediffmail.com> wrote:
Dear Sir, There are some interesting features to the whole affair.
1. Mr Mistry's appointment was cleared by the Tata Board and more importantly by the
outgoing chairman Mr Ratan Tata.It is difficult to discern other important factors that
were at play during Mr Mistry's selection. On can definitely believe that sound business
and commercial acumen would not have been compromised.
2. The age of Mr Mistry was also in his favor. He was also a Director on the Board being
the largest stakeholder ( M/s Shapoorji Pallonji).
3. Mr Mistry's appointment also reflected the smooth succession at the top most level.
4. We have to also reckon that Mr Tata's earlier expansion into going overseas were not
delivering the kind of profitability that was expected of a Business House such as
Tata's.
5. We do not know how but the Corus and the Land Rover acquisitions reduced the brewing
labour unrest in these firms ( they also employed a huge number of workers). The British
Govt was thankful to the Tata's for this.
6. The clout of the Tata Group was also sought to be exploited to promote the DoCoMo
Company of Japan in India ( this is the subsidiary of the parent NTT a national carrier
of Japan).
7.Mr Mistry talks about the Nano Project of the Tata's. It was stated as a losing
proposition right from its introduction as the cheapest car on Indian roads. Despite the
losses, production continued so losses were piling.
Mr Mistry sought to close down all these losing businesses as they were bleeding the Tata
Group. Are we to believe that Mr Mistry took the decisions without consulting the board?
Mr Mistry could be faulted for not making his vision for the Tata Group under his
stewardship clear to the Public on his taking over. Most Chairmen do so in order that
they may not be faulted for their failure to pursue their vision steadfastly. In the
absence of such transparency, his decisions would have had an impact on the relationships
between two countries( considering the size of the Group)
In any case the sudden removal of the top most executive officer of the respected group
smacks of arbitrariness on the part of the board.
Regards,
K.Paranjpe
On Fri, 28 Oct 2016 18:57:32 +0530 supriya biswas wrote
>
Why did they at all select him to that position? Now the question of culture, values and
ethics are coming to the fore...were they sleeping during the last four years! I am sure
the Tata sons board members have to answer this questionto their shareholders.
I don't want to get into the debate of what or who is right or wrong, but I feel the
entire episode is rather very shoddy and not expected from the world class Tata Group.
Dr Supriya Biswas
Kolkata
From: join_mtc@googlegroups.com on behalf of Stephen
Narayanan
Sent: Friday, October 28, 2016 10:42 AM
To: join_mtc@googlegroups.com
Subject: Re: [MTC Global] Sudden Removal of Cyrus Mistry from Chairmanship
I'm Sorry Mr.Reddy your conclusion is more of a confusion. Every Director/Chairman/M.D or
Propreitor have the right to remove (read sack) a non performing employee. There are a
lot of things which had gone wrong and not just the sell out of Corus
and the legal issue with Docomo. Ratan Tata's very own humanitarian vision which led to
the birth of "NANO"was dubbed by Cyrus as a loss making unit to be closed down. Talking
of notice period, lot of indications and opportunities were given to Cyrus to mend
his ways and explanations sought for some actions were not responded. When the group
asked him for his vision, he gave vague response which showed that he did not have the
necessary talent for coming out with ideas.
Also his immediate response of making public - confidential reports and correspondence
shows that Cyrus himself does not have nor follow any ethics. I will give this much to
the group of elders that besides the respect they commanded for their vision and
mission which were not always driven by Profit motive, the outgoing chairman should
demean these very vision and mission of the elderly group in itself would have been quite
painful to the people who selected him for the task.
Stephen Narayanan
Freelance Educational Consultant/Corporate Training facilitator
Mob.:-9868386192
On Thu, Oct 27, 2016 at 4:09 PM, Maheswara Reddy
wrote:
Dear sir
Cyrus Mistry Removal is Unparalleled in Corporate History
Tata is a brand of family business in domestic and international. Tata Group has 12 lakh
crores of turnover per annum and also the group raised to top 5 place in the market
capitalization.
And its turnover is equal to 10 Indian states annual financial budgets.
It has wide conglomeration range from salt to software in the corporate world. Its
dynasty extended across globe covering various countries like Africa and Europe, US and
UK etc. Managing and
governing such a big group is toughest and challenging job in satisfying all
stakeholders including investors, employees, government, board and suppliers etc.
Normally in the process of managing all stakeholders somewhere and some point of time
knowingly or unknowingly the interest of majority or minority stakeholders might be
ignored. But that is
not a serious reason for taking such a stern decision by Tata group. For resolving the
issue and conflicts among the groups can be settled with Company Law Board and Courts.
Taking the Company Law in the hands of individuals will spoil the harmony and trust among
the investors and employees.
As we are aware that earlier Mr Ratan Tata Said that Mistry is our future visionary
leader to drive the group and as such Mr Mistry has been placed as Chairman of the Group.
When has taken
lead the group turnover is 101 bn USD. During his tenure i.e December 2012 to till
yester day its turnover is hardly improved say 103 bn USD. This is the unhappy thing to
the Tata Group. Another thing is
Chief Executives Committee which plays a crucial role in decision making and it comprises
3 from Pallonji Group and 2 from Tata group. This turmoil in that committee made them to
remove
him. But in the corporate governance, this will create insecurity in the corporate
democracy and paves the scope for a big debut about the Board governance and its ethical
values. And finally it may affect the market of the group and faith and trust of the
investors.
Reasons for removal: Mr. Mistry had breached the ethics of the group. Tata Group's poor
financials, Failure in bringing growth , Legal issues with Tata Docomo, Tata
Teleservices,
Clash of interest while awarding contracts, majority members from Pallonji group, Sale
out of Tata Corus as it made loss in the past, No black busters in recent innovation of
its new product, were the reasons behind Mr. Mistry's removal from the Board of TATA
Group.
Conclusion: As per the Articles of Association of Indian Companies Act 1956 and latest
Act 2013 which is a
mini constitution of companies' internal administration, the removal of Mistry from
Chairman Position of the Tata Group is legally unethical. Which means without giving a
notice period removing him is unethical. And it also give bad signals to other corporate
citizens.
On Thu, Oct 27, 2016 at 9:13 AM, Venkatesh Ganapathy
wrote:
This episode demonstrates that Tatas need to change with the times. I am afraid Tatas is
still mired in bureaucracy. However, Mistry's strategies did not work because they were
short-sighted.
If we have a cold, we have to go and see the doctor. we cannot cut our nose. So, if a
business unit is not doing well then corrective actions are to be taken. Sacking people
and selling off businesses is not the solution.
Mistry belonged to Shapoorji Pallonji Group and I am afraid that their tradition is
radically different from that of Tatas. Shapoorji is a construction firm and they were
into film financing
business too. Culturally both groups are totally different. This example shows that even
the giants can err when it comes to succession planning.
I also have a feeling that as a conglomerate Tatas is spreading itself far too thin. I
don't understand why they have to be in some space at all. Their Tata Docomo mobile
service is terrible.
Now they are fighting with Docomo in the court.
The truth is that Tatas need to change. But they identified the wrong person for bringing
about this change. At this critical juncture, Tatas do not need a leader - they need a
visionary.
A relative of mine worked in Tata Power and he was aghast at the way work progressed
tardily. Lot of retired people would be retained by the Tatas and they had their own
style of working.
Every document would take at least a week for a single signature. With this kind of work
ethic the fact that Tatas have survived for so long itself is a miracle!
Tatas need foot soliders now, those who can take meaningful action and steer the company
forward and not those arm-chair leaders who sit in the comforts of their well-furbished
AC cabins
and plan business strategies.
Regards
Venkatesh Ganapathy
On Wed, Oct 26, 2016 at 8:49 PM, supriya biswas
wrote:
This is unexpected from Tata group and has never happened before. Cyrus was selected by
the board. Hence the board should correct the fatal defects in their succession plan.
Infy faced such leadership crisis but NRM tackled it with extreme caution and
there was no court room drama.
Dr Biswas
Kolkata
Sent from my Samsung Galaxy smartphone.
-------- Original message --------
From: Stephen Narayanan
Date: 26/10/2016 8:01 pm (GMT+05:30)
To: join_mtc@googlegroups.com
Subject: Re: [MTC Global] Sudden Removal of Cyrus Mistry from Chairmanship
Well in present scenario anyone going after Cows would definitely attract persecution &
Cyrus is no exception. Not just going after Cash Cows, he even sold off Corus Steel which
Ratan Tata had acquired in competition with Mittal's who acquired
Arcelor for his Son-In-Law. Also see the contrast in Leadership here which is bound to
come for comparison.
Ratan Tata the Tata scion is gentle, humble and an accepted Leader. Whereas Cyrus was
imposed as a Leader. The Atuomobile Group is still far far behind as neither there has
been a Qualitative turnaround nor Sales Volume increment. Now Ratanji can't sit
around till Cyrus gets it into his head to sell off Landcruiser too could he?
All said and done, it is amazing that Cyrus should even think of knocking on the doors of
the court. He would be exposing himself to a bigger risk there if the court were to take
a view that he is not a mass leader product or that his decisions did not
augur well for Tata Group. So in my opinion it would be ideal for him to say: ta-ta to
TATA and consolidate his position in other Tata Business where he spent considerable time
developing business in retail.
Happy Diwali Dhamaka for All.
Warm Regards,
Stephen
Stephen Narayanan
Freelance Educational Consultant/Corporate Training facilitator
Mob.:-9868386192
On Wed, Oct 26, 2016 at 1:04 PM, Jagan Mohan Reddy
wrote:
Market is agog with all kinds of speculations about the possible reasons for
abrupt/sudden removal of Cyrus Mistry from the Chairmanship of Tata group.
As we all know, aLeader or CEO has to be a Visionary. In other words he is somebody who
should beable to make people envision their future ,as well as, energise,enthuse and
empower them. In my view this is where Mistry failed and which led to his abrupt
exit.
Unlike his predecessor Ratan Tata Sir, neither he could envision himself or make the
individual units leaders envision about the possible way forward. He was concentrating
more on cash cows (BCG matrix) leaving others to their fate. And the most important
thing is he couldn't become part of Tata culture andhe could notlay the roadmap to
moveforward.
His attempts to fortify his position by bringing outsiders also has not gone well with
seniors.
This is an excellent case study for bschool students to reflect upon, as there is much to
learn.
With Diwali Greetings
Jagan Mohan
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