Ethical Leadership: Ratan Tata and India's Tata Group

**This case won the Third prize in the BLR Case Study Competition, organized by Business Leadership Review, the official journal of the Association of MBAs (AMBA), UK.



Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

Abstract

This case is about the Tata Group, one of the leading business houses in India, a key emerging market. The group had a long-standing reputation for ethical leadership and was well known for its corporate social responsibility and principles such as the "Tatas don't bribe" and the "Tatas don't indulge in politics".Under the leadership of Ratan Tata, the group carried forward this legacy and consolidated its businesses further in India while also acquiring a global footprint. India, like many markets in transition, was passing through a period when excessive power was concentrated in the hands of the political elite and their cronies.

This had led to a government-dominated economy characterized by nepotism, patronage, and corruption. According to some experts, most Indian entrepreneurs operated in "oligopolistic markets and in sectors where the government had given them special privileges". Despite operating in this market, the Tata Group had managed to build its empire emphasizing the twin pillars of "trust" and "integrity" - so much so that these had become a key aspect of the Tata brand. However, in 2010, the group and its leader Ratan Tata were dragged into the infamous 2G scam that broke out in India. Investigations into the scam in the fast growing telecom sector revealed deep-seated corruption in the country. There was quite a bit of evidence of corporate wrongdoing, and many corporate houses including the Tata Group came under the scanner.

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Issuess

The case is structured to achieve the following teaching objectives:

  • Understand the leadership challenges facing organizations operating in emerging markets, particularly in India.
  • Study how the Tata Group had established a strong position in key industries in India while emphasizing on ethical leadership.
  • Understand one of the key leadership challenges posed to organizations operating in emerging markets - corruption.
  • Discuss and debate whether the Tata Group and its leader Ratan Tata had 'walked the talk' while jostling for additional spectrum in the 2G scam.
  • Discuss and debate whether corruption is a normal part of business, especially in emerging markets such as India, or an economic malaise that needs to be urgently curbed.
  • Discuss what Ratan Tata should do to ensure that the group continues to take forward the legacy of ethical leadership of the Tatas and does not view it as a burden while operating in India.

Contents
Introduction
About The Tata Group
Leadership with Trust
2G Scam and The Tatas
Ratan Tata's Response
Time for a Leadership Transition
The Road Ahead
Exhibits

Keywords

nepotism,patronage,corruption,leadership challenges,walked the talk,ethical leadership,Leadership issues in emerging markets; Ethical leadership; Responsible Leadership; Business Ethics; Corporate Social Responsibility; Values and ethics; Strategies for emerging markets; Corruption; Bribery; Crony Capitalism

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