Tata Group

Appendix A

The Tata Group: an example

The Tata Group is the largest and most distinguished business group in India.

Starting in 1874 with a single textile mill, the group nowadays contains more

than 80 firms in seven main business sectors (materials, engineering, energy,

chemicals, consumer products, communications and information systems, and

services). In 1995, it had sales of Rs. 220 billion and 270,000 employees and

it has a leadership position in many industries.1 Table A.1 describes the

diversification pattern of the Tata group over the 130 years of its existence.

The founder of the Tata Group, Jamshedji Tata, already started to expand his industries to steel, hydroelectric power, modern manufacturing

methods, and technical education and research. Tata Sons Ltd., which now

is the principal investment holding company of the Tata Group, was the promoter of many new ventures in the first half of the twentieth century and

continued to promote and manage all major Tata Group companies until

1970. After this, the managing agency system was abolished, and the group

was no longer a legal construct.

A lot of interdependence remained, however, and Tata Sons still offers

the Tata companies consultancy, management, and financial services. Tata

Sons is also the proprietor of the Tata brand name, which is a registered

trademark for a variety of product classes. The Tata brand name is one

of the most valuable assets of the Tata Group. Tata Sons is not only the

proprietor of this name, but is also responsible for promoting it at a central

1

The information in this appendix is obtained from Khanna, Palepu and Wu (1998),

Khanna and Palepu (2004), the Tata Group website, and Piramal (1998).

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The Tata Group: an example

Table A.1. Diversif ication pattern of the Tata Group

year

industry entered

1874

1902

1907

1910

1912

1917

1931

1932

1939

1940

1952

1953

1954

1958

1962

1968

1970

1984

textiles

hospitality...