AA EditI Tatas Need a Major Reset

Tata Sons chairman N. Chandrasekaran’s decision to step down from his current position when his term ends on February 20, 2027, ostensibly due to internal differences, is unfortunate, especially in the wake of the importance that the 157-year-old conglomerate holds in the Indian economy.

Mr Chandrasekaran, 63, who has spent 40 years with the Tata Group, was chosen to head the Group by Ratan Tata, the erstwhile colossus of the Tata family, institutions and companies. After Ratan Tata’s death, however, the Tata Group appears to be in the midst of a once-in-a-generation review of its purpose and strategic direction.

Tata Group is not just a corporate conglomerate, which is wedded to stock markets. It played a key role in the industrialisation of the country and the promotion of scientific temper among early generations of free India. A large part of its profits go to the welfare of Indians.

Nevertheless, in the last few months, the Tata Group appeared incoherent in its approach and strategy — be it in handling the Air India crisis, or the Reserve Bank of India’s insistence on large NBFCs getting listed or its retail strategy.

The Group appears to be divided over its strategic roadmap, the handling of losses at newer businesses and a way to provide an exit to the Shapoorji Pallonji Group without taking Tata Sons public — issues that need long-term thinking and strategic direction, especially when its cash cow Tata Consultancy Services (TCS) is facing a threat from artificial intelligence.

However, it is high time that the top stakeholders of the Tata Group and Tata Sons sit together and either reaffirm plans or redraw the future roadmap — because indecisiveness does not augur well for a conglomerate that employs over 10 lakh people directly around the world and several times more indirectly — and choose a chairperson who reflects the ethos of the Tata Group.