Succession again

The same retirement rule that saw some of JRDs satraps leave the group will mandate Tatas retirement as well. Some people have suggested that the retirement policy should not apply to the chairman, Tata said in his interview on the website. I have always believed that you dont make exceptions for yourself. So I took the view that the rule should apply to me too. I realize that I have to live by the rules that I have set and step down when the time comes. And that time has come. Cyrus Mistry has been working with Tata for a year now, and Tata says the Tata Sons chairman designate has the analytical skills to steer the business forward and the integrity to uphold the Tata ethos. On Monday, Tata Sons formally announced that Mistry would take over on 28 December and Ratan Tata would become chairman emeritus. Some of the challenges that lie ahead of Mistry are akin to those Tata faced when he ascended to the top job.

The succession this time round may not be as acrimonious as it was during Tatas time, but with many of Tatas chieftains nearing retirement, Mistry will have to scout for young talent from within the group and outside to fill the void. He has already started doing that. Madhu Kannan, a former chief executive officer of BSE, was his first hire. You can live in a house, drive a car, make a phone call, season your food, insure yourself, wear a watch, walk in shoes, cool yourself with air conditioning, and stay in a hotel all courtesy of Tata firms, said an article dated 1 December in The Economist. The dilemma is that the group may not necessarily be making money doing all of this. Tatas telecom business, for instance, is under severe strain following the upheaval in the sector in the wake of the 2G scam, and its future is uncertain. Elsewhere, though Taj is still one of the most respected names in the Indian hospitality industry, Indian Hotels isnt too profitable, with acquisitions weighing on the firm. Problems with Tata Steels European operations persist and the current dynamics of the steel business at home arent too exciting either.